I am clueless on how Storm unlocking works.

There is one issue with the Storm I have. It has a banned ESN. Is it still possible to unlock this phone?

who banned it?

banned from what?

The network. It was reported lost/stolen. If I were to try to use the phone on the Verizon network, it would deny it access.

If its lost or stolen, shouldn't you return it or try to locate the actual owner?

Negative. Customer got a replacement Blackberry through insurance because he lost the phone initially. He found it later and brought it to our store.

The phone was originally reported lost, so it is banned from the Verizon network, and because insurance was used on it, it cannot be re-enabled due to it being classified as insurance fraud.

So now it just sits here with no future.