Quoted from pinchamp:
In these situations the seller has to hold the property, take time and effort with the conditions, etc but still if not sale, no keepie the deposit.
You are correct but only because these real estate sales are conditional to financing, inspections, etc. If you wrote a non conditional purchase contract and backed out because it occurred to you that down the road something might happen to the property, you would lose your deposit. That would be your due diligence prior to committing to the purchase.
Quoted from Damien:
I have a family member that is in the police (fraud department) in his city, and I'm considering that approach.
Tend to think your family member will tell you it's a civil matter. Doesn't sound like any fraud took place unless he were unwilling to complete the sale as agreed.
I think if you found he misrepresented the machine then he owes you the money. Otherwise what is the point in a deposit if it can be taken back at any point without good reason.
It would also be an issue if a seller takes a deposit but then returns it because he sold it to someone else for more money. There is a mutual commitment in place with the deposit in my opinion.