Well, my local law enforcement was of no help and this was the solution that the Apple store support staff gave to me when I went to the store and told them the story. At the end of the day, what is important to me is that I know I am safe. This wasn't exactly a black and white situation.
It actually think you're not the original owner of the phone at all, but the guy from the Domician Republic, running a stolen phone operation, who concocted this ridiculous story to spread misinformation to other iPhone users to whom this may have happened. I don't believe Apple ever gave you this advice -- they're basically endorsing theft of iPhones, which is basically the opposite of all the effort they have engaged into to prevent theft, and illegal use of an iPhone. Which Appe store gave you this advice again?