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Sounds like it might have had an IMEI lock put on it, which usually happens after a phone is recorded as stolen.
Although that should also prevent data and sms from working too though...
Previously worked with a Telstra Partner however I am not a Telstra Employee, just a fellow customer helping when I can.
Unfortunately the advice from the Telstra reps is correct. The only person who can authorise the IMEI to be unblocked is the original purchasers of the handset.
If you are unable to contact the original owner, as much as I hate to say it you have likely blown your money.
You may wish to seek advice from Police in this instance.