How to remove old icloud from iphone?

So my friend know a guy who sells iphone 5. Lets call the guy from Peter, Peter sold me a stolen iphone 5, i didn't know because Peter told me first that it was brand new not stolen. And when i try to restore my iphone 5 it says that i have to logg on the icloud, the problem is the mobile is stolen and i won't be able to crack it or know the password, it just says the email. What can i do to get pass that or remove the icloud?

Added (1). Damn, its like losing 600 dollars. And i don't have the guts to say something to peter because he will beat me.

Apple's new security features in iOS 7 are preventing you from making the phone a new owner because you were sold a stolen phone. There's no security bypass that I know of. If I did know one, I probably wouldn't tell you it because it'd make you a bad guy.