Originally Posted by
NightShift
If you buy a used bike from a LBS, or a police auction, it may still turn out to be stolen.
I'm not a lawyer either, and whether the stolen property was purchased from a Craigslist seller, a brick and mortar store, or a law enforcement agency, you have still received stolen property, and I guess you could be charged for that, but I assume most prosecutors wouldn't pursue the matter if they believed you had a reasonable belief the sale was legal. Just don't piss of your district attorney.
In the case of a police auction the sad truth is that more likely than not that the bike was in fact stolen hence it being in the police auction. And that the police have had it in their warehouse for x-amount of time waiting for the rightful owner to claim it before they've put it up for auction.