Disclaimer:  The materials provided below are informational and should not be relied upon as legal advice. 

Your description raises some questions here:  First, if this person did not have title to the car, then he could not possibly transfer good title to you.  Second, if you believe this person defrauded you about the value fo the car then the remedy may be to "rescind" the transaction (that is, you give the car back to him and get your $1,000 back).  Keep in mind that proving fraud is very difficult.  You will need to prove this person intentionally lied to you about some important matter, this person wanted you to rely on what he was telling you, you in fact relied on his statement, and you suffered a damage.  Keep in mind that if you knew or should have known he the statement is false (such as he told you the car is an 8 cylinder, but you saw that the engine was a 4 cylinder) then you could not reasonably rely on his statements. 

Best of luck to you, and be sure to consult your own attorney.