IPhone Reported Lost by the Seller!

Hey, I bought an iPhone 4 off someone, after purchasing it, a couple weeks after (while waiting for it to be Unlocked by Vodafone) the Seller admitted that he rang and reported it 'lost' so that it would get Blacklisted so i'd return it back to him.. so he could then sell it for more!!! (arsehole!)
Well, it isn't lost, I bought it off him via PayPal...
I think its a little ****** what he's done, but is there any way I can get this iPhone 'unblacklisted'?
I've been trying to get a hold of 1 for awhile now to replace this 1 but the 2 I purchased.. the Sellers were complete time wasters!!
so im still trying to get one, so I can send this 1 back to the arsehole... but having no luck yet,
I wanted to purchase via Apple but most of my money is in my PayPal Account and it takes days to transfer to my Bank!
(as Apple dont accept PayPal Payments)
So yeah.. is there any way Apple can unblacklist it?
thanks.

I've bought hundreds of items on eBay, no problems at all with anything, and not really any problem with this, it's jus that he was selling it, I bought it, but then he noticed the eBay Fee which was like £30+ (cant remember exactly)... all of a sudden I woke up once morning and noticed No Service, so I emailed Vodafone and they said it had been reported stolen... so obviously I contacted the Seller and he said he reported it lost so i'd send it back to him :-/ weird guy!!! but yeah I opened a Dispute on PayPal but they gave me until the 31st to send it back, well... i've not been able to get my hands on a new 1 yet so cant send this 1 back yet! pain in the backside as I need 1 on me at all times because of work... once I post this 1 off and supply the Tracking Number on PayPal (after I open another Dispute) they'll Refund me the money, but was just wondering if there was anything I COULD DO to get it off the Blacklist, never mind though, thanks anyway.

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