Hello 'spiritofgreywolf',
"Pass it by", . . . That's good advice. 
The seller claims to have found the phone, - possible, sure, - but it has to make you
wonder where it was found and if/why no attempt was made to restore it to its owner.
You say the seller, <<can not tell even if it works let alone what settings it has>>.
You mean to say you are still considering buying something that may be stolen, but
also may not even work??
If it doesn't work and you want compensation, you will have to send it back with
Delivery Confirmation at your own expense. After all, the seller is clearly making
no promises.
<< if I buy this phone it can be traced back to me for having someone elses item>>
Oh, 'possession of stolen goods', that sort of thing?
No offence, but why are you even asking? Whether or not the seller ought to be selling
is NYP (not your problem).
Walk away.