Ipod troubles

I recently bought an Ipod 5G which I believe was stolen property. when I got home to connect to iTunes and authorize my computer, it will not let me. it asks for Apple ID and password of which the device was previously connected to. I tried updating the ipod and restoring back to factory settings by holding down the home button and plugging the device into the computer at the same time. I was prompted through all the steps of and update and restore but it keeps saying "This Ipod is currently linked to an Apple ID (d****@aol.com). Sign in with the Apple ID that was used to set up this Ipod."

is there anything I can do to be able to use this device? I obviously had no idea where this device came from or who the previous owner is as I bought this in "used, working, factory restored settings". am I now out money and a useless device?