Bought phone on cl. Phone is not stolen but this is a scam.


I bought the brand new samsung galaxy s vibrant 4G T959V T-mobile from someone on craiglist on 30 March 2012. The phone has the box, the charger, usb, headphone, sd card, manual and T-mobiles new sim card. I have checked it and it works well, nothing wrong and not lock. Then I resell it for someone on craiglist on 30 March 2012. She has checked it and its still working in good condition. She used the phone from 30 Mar 2012 until 18 Apr 2012. Then the phone was lock on 18 Apr 2012. She called T-mobile and T-mobile said the phone was stolen, so T-mobile have to lock it.
So she called me. I thought the guy sold the phone for me reported the insurance to said the phone was stolen to claim the new phone from the insurance. Then T-mobile just locked it.
This is a scam. I have the guy's phone number. I have texted him about that but he didn't reply me.

So What do I do now?
1/ Call police and report the guy is a scam?
2/ Give the buyer money back. And what do i do with the phone?

Do I arrest?