Iphone 5 and it getting reported stolen?

I got this iphone 5 with the latest update (7.1.2) for a 100 bucks from a friend of my dads and it's a pretty great deal. Probably too good to be true. So in case they try to report it stolen and **** me over, I want to **** them over by restoring it and making it so that the phone won't be disabled. It still has a line. Carrier is verizon but I wish to flash it in the future. What can I do so they won't run off with my money?

The faster you act the better chance you have: Go to settings > general > reset > Erase All Content and Data. If you can do that, its all yours, good luck!

No matter what you do if they report the phone as stolen if will be blacklisted (blocked) forever. Don't but the phone until it is of contract.