I assume you can just flash it to a new serial number, but I don't know that much about it. The T-Mobile folks didn't seem surprised when I said it had been stolen, and had a procedure to cut off the sim pronto, so it's not too unusual.
Maybe he was a secret agent on a mission and he needed to call the CIA RIGHT NOW to report some amazing world-saving discovery! By giving up his phone, he could have been SAVING THE WORLD!