If someone buys something from me, and gives me a deposit, then chamges his mind, I will refund the deposit, unless there are circumstances to warrant keeping the deposit. This seems to be one of those. It's good business and good karma to bend a little on these transactions. I don't think either party is a thief or dishonest, here. The guy who removed the engine to sell the car is entitled to some compensation. I've been there before. I would give him back $1500.00 of the $2000.00 deposit. That's the fair thing to do.