I was given a stolen iphone, what should I do?

So to make a really long story short this kid I know gave me an iPhone 6s and told me his friend gave it to him because he forgot the password and couldn't unlock it so he just bought a new one and gave the old one to him than he gave it to me and asked to unlock it for him. I said sure and was telling my friend about it and my friend said that the kid stole the phone from Another student. I have been trying for 4 weeks now trying to get ahold of the kid to give it back, I just learned Friday that the kid who had his phone stolen that he got in trouble and hasn't been to school for a whole month. I have no idea what to do with it? Do I just keep it? Give it back to the kid that stole it? I just want to do the right thing! P.s he got a new phone and I'm guessing he got expelled.

Turn into police and tell them you its someone lost phone

Go to the police?

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