Do I have to give a deposit back?

i fail to see the fraud here, he attempted to sell the car and the BUYER never came through to finish the deal

if it was the SELLER who wouldn’t complete the deal, then i would agree, but thats not the case here

and if he resells the car on ebay and it goes for LESS then the original sale price, the old buyer REALLY has no ground to stand on, because it can be argued that the seller lost money on the deal

best bet: resell car
-if it goes for the same amount (or more)as the old sale, refund old deposit
-if it goes for anything less then what he still owes on car, keep his deposit
-if it goes for anything in between, partial refund, which in this case wouldnt be a slippery slope, because you have a new sale price to back you up in court