Car registered in my name, but reported stolen.?

I traded my car for an suv. The person we traded with had the title and ID which matched the title. I put the suv in my name 8 days later, received the title in the mail. Today (2 1/2 weeks later) the police come to my door, tell me my vehicle was reported stolen, and impound it. Come to find out, the person who I traded with, had a fake ID and had paid the original owner for the suv with a counterfeit cashier's check. The original owner then turned the vehicle stolen (approx. 2 1/2 weeks later), which is legally in my name now. I have had police say that the vehicle is still technically his, and I've had police say that it shouldn't be my fault that the owner accepted a fraudulent check, and that I shouldn't have to pay for his mistake. As it stands now, I have no vehicle, and the previous owner is trying to get his suv back without a title. Shouldn't the vehicle remain mine, since I did everything I was supposed to do and he was at fault for accepting the bad check?