So he never paid taxes by not getting it registered. AKA Fraud.
As is = As is. He can tell you it shits unicorns and pisses rainbows, but as is on a receipt is as is. Plus its one word against another in small claims court. Even if you won in court, nothing forces him to pay. So its a shit show either way. You should of had someone look at it before you bought it. Life lesson, sorry to say it.
Good luck! Chances are you can get someone thats not at a shop to do it on the side, would probably be about $1500, plus then you will know the engine is good. Oh well, just my two cents. ENJOY!