Why did Verizon give out my number? Can I sue?

I found an iphone 7 128 gig that was not reported stolen or lost so i had it activated and then the previous owner called Verizon and gave them my serial number and they told her that the phone was activated. They gave her my number and she called to asked for the phone back i told her someone sold me the phone for $650 but now she called the police. I told the police I bought the phone and prior to buying I check to see if it was stolen and they no. Police said this is going to end up in court and they can't make me give the phone back. If this goes to court I want to sue Verizon for privacy

It's not your phone, duh

You stole the phone - you have zero right to it.

"Theft by finding" (or "Theft by omission" etc) is a criminal offence. In law it makes no difference if the item was in the middle of a desert or you "found" it it someone's pocket, the penalties are identical.

The fact that it was not yet reported lost is irrelevant, it was never your legal property.

The real owner gave _their_ serial number for _their_ phone and they do have a right to recover it by any practical means.

The only way you could possibly have kept it legally is if you tried all possible means to locate the real owner by enquiries with phone company & police etc. And did nothing else that that with it for at least eg. 30 days; 90 days is a safer period.
(Someone could have lost it when just leaving on holiday - it's still their phone when they get back).

The instant you decide to keep it rather than return it, without those steps, it becomes criminal theft.

https://www.justanswer.com/law/21hyz-prosecuted-theft-omission-returned.html

https://en.wikipedia.org/...by_finding

ps. If it goes to court and you lie under oath about how you obtained it & that is shown to be false, you will get additional charges & sentence for perjury.