This scheme was common after the US economy collapsed in 07 with a few twists. Car dealers took in trades from new car buyers which had outstanding loans and never paid them off, leaving the former owner owing the money to his or her original lender. As I recall, the dealer would take a corporate bankruptcy and list the former owner as a creditor. I don't remember any dealers or their agents being charged with a crime. It became a civil matter between the former car owner and his her original creditor.
I don't think the poor fellow with the Camaro has any claim because he signed over his title to the car to the race driver. It became a civil business matter at that point with the Camaro owner assuming all the risk. A wiser way to have handled the transaction was for the Camaro owner to keep title and surrender it upon cash receipt at the time of sale and for him to pay the race driver his 10 percent on the spot. The car would be insured at that point as well under the buyers policy. Another way would have been to have a national escrow company hold title to the car, similar to home sale. Of course the race car driver would have been insulted by these suggestions.
It would be advisable for a buyer of such a car to pay a private detective, usually they are retired police officers, to background check the chain of ownership and current title. There are circumstances involving probate, bankruptcies, or civil judgments which could cloud the title. It is possible that even after the new buyer registers the car there could be a claim to the car and the buyer could lose the car in court. It happens all the time.
There are car title insurance companies which say that they will guarantee title and defend under these circumstances. I have read the fine print and these policies all state that there is no coverage for facts unknown to the insurance company at the time the policy is issued. However, this term and condition most likely would be overruled by a judge because the policy owners sole purpose for purchasing the policy would be for unknown title hazards. However, the insurance company, if they are still in business, would stonewall payment for years using appeals and other legal maneuvers.
A friend had his Porsche stolen almost 40 years ago and he is still looking for it. He looks for cars like the one he lost for sale and gets the VIN#. If he see's the car and it has that little ding, dent, or tear or stain that he knows about, I feel sorry for the seller because he will most likely lose the car in court through no fault of his own.
Most of the buyers of collectable cars get screwed on condition issues. Finding an honest car for a fair price is not that easy because there are very few for sale. That is the reason why cars from a well known collection sell for big bucks at auction.
