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Yes get the police involved to cover your tail. With this statement "He was graduating and has to report to his new assignment in Alaska". He sounds military, so as long as you have his real name, the cops can track him down if this was a stolen vehicle deal.
If it was ever licensed or tagged in his name, the cops can track him down.
Safe bet it to do what ever it takes to get the title in your name, legally. But you have no recourse to the PO unless you get the DMV involved first and then see if the cops need to get involved.
Hope it works out for you. This might be a hard lesson learned about title/vin ck before cash....
I would call DMV and tell them what's going on and they can tell you the procedure. This way you can get some answers without them knowing who you are. Then you know what your options are. In Iowa they have a bonded title. They trace the VIN and if a previous owner comes up they will send them a certified letter. If they don not respond then you can place a bond on the truck. After 3 years if nothing comes back as stolen or anyone has claim to it, it is titled free and clear. Here you have to pay the bond which is a market value designated by DMV. Or pay a bonding company. After the 3 years you get your bond money back.