I'd recommend contacting all the carriers that this phone is compatible with, and tell them that the phone has been stolen. Give them the IMEI number, serial number and whatever else.
If you can get law enforcement interested in the case (highly unlikely, but who knows), they should be able to issue a search warrant, and get the location of the phone from the carrier. If they can track it down to a residential address, then they may be able to find the actual person.
It would be helpful if the other sellers also had remotely trackable items. Regardless, you'll want to be coordinating with them on the item descriptions.
IANAL either. BUT, I know a guy who had his car stolen through fraud. The fraudster gave him a bogus cashiers check (and his bank took over a month after deposit to alert him that the check was bogus).
His car insurance paid out on a theft claim. I'm sure there were more details to it, but I've never heard of "fraud insurance" as part of an auto insurance policy.
FYI (everyone): US Post Office offers a money order verification system to avoid bogus transactions like these. I've gone so far as to choose a meeting location around the corner from a post office location and insist on a money order from that location.
If you can get law enforcement interested in the case (highly unlikely, but who knows), they should be able to issue a search warrant, and get the location of the phone from the carrier. If they can track it down to a residential address, then they may be able to find the actual person.
It would be helpful if the other sellers also had remotely trackable items. Regardless, you'll want to be coordinating with them on the item descriptions.