We use https://swappa.com/esn, a website that includes information from carriers, law enforcement and insurance companies to identify whether a device has been reported either lost or stolen. https://swappa.com/esn is a tool designed to detect potentially stolen goods, including smartphones, tablets and computers. It is a reporting service which compiles data from major wireless carriers, to provide a database of lost or stolen devices. 

We are constantly re-evaluating our procedures to make sure we are doing our best to protect consumers. Today, only a fraction of one percent of devices we receive are flagged as lost or stolen, and we believe that thieves are unlikely to try to sell a device online because they won’t want to disclose identifying information like email and mailing addresses. To the extent we do see devices that may have been reported as lost or stolen, we regularly cooperate with law enforcement around the country in the investigation of those incidences.