We're sorry but this device has been blocked from network use?

Ok so I bought an iPhone 4S AT&T not knowing it was stolen. How would I make this phone work to where I can use it on my service AT&T? If I were to unlock it would it work?

You don't, that is what you get for buying stolen things.

Seems to me like you need to be talking with AT&T about returning the phone to it's proper owner. And giving them the contact info for the person you bought it from; that assuming you did not steal it yourself.