What's the right thing to do here?

I bought a friend an iPhone from this guy that had a cell phone repair shop next to my work. I paid the gee pair shop guy for the phone and my friend paid me. As soon as I gave the phone to my friend he started saying well this is a stolen phone because the phone wasn't manufactured restored. Now he wants me to give the phone back and get his money and the guy won't take the phone. Not ganna waste my time with this. I honestly tried to help my friend get this phone cause it was a good deal and he accepted to buy it. He agreed to take the risk right? Should I just say it's not my fault and let the friendship suffer as it may?

Unfortunately youve involved yourself by vouching for the phone and the phones seller

if the phone does not perform or is otherwise truly unusable it falls on you to make an effort

certainly there's no legal obligation for you to but morally you have assumed that responsibility

at the very least you need to bring the two parties together before you take a dive

How good is your friendship? Sounds like theiy're unappreciative. I think a good friend would see that you had acted in good will by trying to help.