NYS Used Car Dealer Used car salesman in NY sold me, and probably many others, salvaged car Ripoff New Rochelle New York

I purchased a used 2001 Toyota Corolla on May 9, 2006 from a used car salesman. The car was advertised (along with other cars) on Craigslist.com and the salesman included the picture of the car, VIN# and description of the car's excellent condition.

I subsequently obtained a Carfax for that car a few days later. It reported no problems at all. Then I went up to see the salesman (operates out of his own house) and had a car checked out by an independent mechanic, whom I paid. I was told the car is in excellent condition.
I purchased the car for $$7000 and paid the salesman additional $600 for the NYS taxes and the car inspection. He gave me a bill of sale for a purchase of used car and it was checked that I'm buying the car "as is". He inspected the car in a local gas station and issued me a temporary registration sticker

The salesman handed over to me the clean title, showing previous owners in NJ and no problems with the car.
He also wrote a NYS DMV Retail Certificate of Sale at the time of purchase.

According to the title -the car was driven in Northern NJ and there was no record of any salvage, lien or other impropriety mentioned. When I went to a local DMV in Queens to register the car - I was able to obtain a 2 year registration without a problem. I had Geico insure my new car after providing them with a VIN# without a problem I also turned over to the DMV the title given to me by the dealer and was told that the new title in my name will be mailed in 2 months time.

2 months later I received a letter from Albany Salvage car unit. The letter informed me that my car has a salvage history and needs to be inspected before the new, salvage title can be reissued in my name.

I was shocked by the DMV findings. I spoke to Albany Salvage DMV unit that send me that notice and explained the circumstances under which I purchased the car. I paid the $150 fee and scheduled the inspection.They made an appointment for me to see a car inspector. Unfortunately the inspection could not be carried out since I did not have the invoices of the parts that were used to repair my car and did not have the Insurance company accident/salvage report.

I contacted the salesman. I told him that I must hand in the parts invoices and Insurance accident/salvage report to DMV Auto Theft Inspection Unit in order for them to inspect it and to issue the salvage title in my name.
He admitted that he lied to me and also told me that he has all original invoices of parts and the Insurance accident/salvage report for my car. I was also shocked to hear him say that he purchased the wrecked car and fixed it himself. It turns out that he owns a salvage/repair shop ( I found out through the internet) and had my car fixed there ( I can see it from the parts invoices that they were sold to that shop, under his name and he signed these invoices himself) This guy has been selling a lot of cars through Craigslist.com and Internet for years and I'm sure that he's been defrauding lots of innocent buyers for a long time.

He actually had a nerve to complain to me that he never had a problem with a transfer of salvaged title to a clean title in the past until, as he told me "they just closed the loophole". I can just imagine how many other people who bought from this guy in the past are driving salvaged, potentially dangerous cars without realizing it!
I received all original invoices of the car parts and the Allstate insurance report from the salesman in the mail. It shows that my car's front end was totaled and the car was declared a total loss by Allstate. There is also a record of air bags taken from another Corolla and placed into my car.

Now I'm finding out that NY DMV Inspection unit does not allow another car's air bags to be installed into a salvaged car. The airbags must be purchased new from the dealer. In my case that would be a $3000 expense.
The bottom line is - I was defrauded. I can't pass the inspection, also meaning that I cannot get the title in my name or re-register the car and the used car salesman will not give me the money back.

I feel that I was wronged by several parties listed below:
NY State used car salesman that sold me the car .
Autobody shop (owned or co-owned by my salesman) that reconstructed this salvaged NJ car without notifying DMV and failing to report to the NY authorities that it was a salvaged vehicle.

DMV of NY for not having the info regarding the salvage status of my car at the time of purchase (they issued a 2 year registration to me without a problem the day I purchased the car).

Insurance company that sold this salvaged car at a profit and probably failed to report it salvaged right away.
Carfax who reported no problems and who "guarantees" its results - or they will buy back the car. - I do not seem to get through to anyone there.

The local mechanic whom I paid to check the car prior to purchase and who assured me it's fine.

My Geico insurance Co who insured the car when I gave them the VIN at the time of purchase and told me there are no problems with the car.

Thank you so much for taking your time reading all this! Please tell me what recourse I may have. I have additional details pertaining to this case that I would prefer to disclose in person. Please help!!!!

Marty
Rego Park, New York
U.S.A.