My blocked cell phone is in use

I am absolutely disgusted and very angry. Earlier this year my travelling companion and I were held up at gunpoint and our cell phones ******. A case number at SAP was opened and the IMEI numbers on our phones were blocked through our service providers. Today I received an email from a person who has my ****** iPhone 5. He/she also cc'd me on my work email address. This is not the worst of it - I have been requested by this person to remove the iPhone from my iCloud so that he/she can use it (he/she has been battling for a week to get the phone to work properly) and would I mind sending them my password so they can erase the phone properly. I was provided with a full name, email address, location and cell phone number. I did some \googling"and the name and surname of this person who appears on the email is a Manager at MTN shop - MTN is my service provider.<br> I would like to know how if an iPhone is so called blocked by MTN it can be used again? I have been told that MTN \""soft blocks\"" ****** cell phones as 70% of their main revenue is from pay-as-you-go clients. Is this true? Please can you explain why my cell phone's IEM number was not blocked as requested and/or blacklisted"""