W.W.
Well you can deactivate the phone so no one can use it.
When you called Apple - did you ask them how much it would cost to have them help you or do it for you?? If you have an iPad - there is a function there to find a phone - I remember seeing it on the news - a girl was in a car accident and the sheriff found her via her cell phone....
I would deactivate the phone via AT&T - listing it as lost or stolen - that should make it unable to work. If the person who picked it up tries to activate it - there SHOULD be a warning or alert to anyone trying to activate it in a store....
good luck!