REDWOOD CITY, Calif.–Apple pressed local police to investigate the loss of a next-generation iPhone a day after Gizmodo published photographs, telling investigators that the prototype was so valuable, a price could not be placed on it, according to court documents made public Friday.

In response to arguments made by CNET and other media organizations, a San Mateo judge unsealed documents (PDF) that provide a detailed glimpse into an April 20 meeting between Apple lawyers and executives, and law enforcement. They also highlight a madcap dash for evidence that evening that led a police detective to a gas station, a church, and a bush in Redwood City where a thumb drive and a 1GB Lexar Media compact flash card were allegedly hidden.

Summary from San Mateo County detective’s affidavit for the search warrant.

(Credit: Declan McCullagh/CNET)

During the meeting with law enforcement, Apple attorney George Riley told detectives that the publication of evidence of the device by Gizmodo–part of Gawker Media–was immensely damaging. “People that would have otherwise purchased a currently existing Apple product would wait for the next item to be released, thereby hurting overall sales and negatively effecting Apple’s earnings,” Riley said, according to an affidavit prepared by a police detective made public on Friday.

Apple CEO Steve Jobs personally contacted Gizmodo editor Brian Lam to request the prototype’s return the day the story was published on April 19, but Lam refused to do so, unless the company provided “confirmation that it is real, from Apple, officially,” according to an e-mail message that was also made public.

“Right now, we have nothing to lose,” Lam wrote. “The thing is, Apple PR has been cold to us lately. It affected my ability to do my job right at iPad launch. So we had to go outside and find our stories like this one, very aggressively.” (Gawker Media had offered to pay anyone who gave it or lent it an Apple prototype.)

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Brian Hogan, a 21-year-old Redwood City, Calif., resident, found the phone in a bar. But the affidavit prepared by detective Matthew Broad in the San Mateo County Sheriff’s Office reveals that an important tip came when Hogan’s roommate, Katherine Martinson, called police on April 21 to let them know that he had examined it.

Hogan told her that Gizmodo had offered him $10,000 for the phone, and showed her a camera box containing $5,000 in $100 bills, according to the affidavit. It says: “Martinson said Hogan also told her that he will receive a cash bonus from Gizmodo.com in July, if and when Apple makes an official product announcement regarding the new iPhone.”

San Mateo County District Attorney Chris Feasel talks to the press Friday after documents relating to a next-gen iPhone that went missing are unsealed.

(Credit: Declan McCullagh)

Broad, the San Mateo County detective, began to prepare a request to search the apartment on Farm Hill Blvd. the following day when, he said, he received an urgent phone call just before midnight from Martinson, saying Hogan and their roommate Thomas Warner were removing any evidence about the iPhone from the apartment and leaving in two separate cars. Broad said he tracked Hogan down at his father’s house, also in Redwood City, and learned that Hogan’s computer had been left at a nearby church.

Warner showed up the house at 1 a.m. and was arrested on two outstanding misdemeanor warrants. Warner claimed that a prototype sticker from the iPhone fell out of his wallet at a Chevron station, and later said a 512MB thumb drive and 1GB Lexar compact flash card were under a bush on Harding Avenue, the affidavit says. Police say they recovered all the discarded hardware.