In the UK there was a problem of people reporting their phones stolen so they could break the contract.
One police station I walked into had a sign saying that they investigate all reported phone theft, and would vigorously prosecute anyone making a false report.
In general you report the phone to your service provider (so they can block the IMEI (and there's a potential 5 year prison sentence for people who change that) and then the police to get a crime reference number and then whoever has insured the phone (sometimes the provider) to give them the reference number.
Perhaps this is a niche for a specialist to enter. Create some tool that gives law enforcement and phone providers easy to use data-mining to allow them to track stolen phones and catch thieves. (I haven't described it well, but this would be something with tight integration between law enforcement and providers; it'd have some kind of auditing to ensure correct legal documentation; it would allow data on many phones to be displayed so you could heat map where phones are stolen from or where stolen phones are ending up, etc.)
I just don't understand how reporting the phone as stolen would allow them to break the contract without having to pay the fee, or allow them to get a new phone without paying full price ( without going through the insurance).
I know little about IMEI resetting (which is a good thing I guess), but I thought it was a separate thing from phone unlocking?
Network providers can give you current information of location, once you show them report that you have registered the device as 'lost' with the police.
When your cell phone gets stolen, the police are the right people to turn to, not your network provider.