[gprsh924]

Chen didn't sell it, he was part of the Gizmodo team that purchased the phone.

Here is the breakdown:
Apple engineer gets drunk and leaves his phone in a bar in Redwood City on March 18
Mystery man finds phone, plays with it a little bit and figures out it is something new
Overnight Apple remotely wipes down the phone
Mystery man half-heartedly attempts to return phone to apple
3 weeks later Gizmodo buys phone for $5000
They spend a week investigating it and verifying it is real
April 17 they put it up on the website
the next day Apple requests that it is returned
Gizmodo says they will return it and tells its editor Jason Chen (who is in possession of the phone) to return it, and he does
shortly thereafter, Apple gets a warrant and raids Chen's house

Go to gizmodo for a more detailed account