I thought the whole point of Cash for Clunkers was to get the vehicle molten back into metal for China, or sent to Mexican drivers, not re-sold in America.
It was my understanding that the dealer had to render the vehicle inoperative by draining all fluids, putting some type of chemical in the engine, and running the engine until it siezed. These vehicles were not to be resold. The dealer couldn't get the cash until proof was offered up.
No, I'm thinking someone bought a salvaged vehicle on a salvage title and put fake or stolen plates on it. Many salvage vehicles drive and operate fine, they just have more damage than the insurance company was willing to pay for - or someone had an old vehicle towed because it was more expensive to fix it than it was worth.