Someone stole a guitar of mine and it ended up being sold in a local pawn shop. The only way that I got it back was due to my having made a police report of the loss. The police said that if I discovered the guitar in the possession of another, that they would confiscate it from that person and return it to me. It seems that the person who tried to sell it, via a local paper, had purchased it from the pawn shop unaware that it was stolen. Someone pointed me to the ad.

So, yes, pawn shops do sell stolen merchandise. I was directed by police to contact all of the local pawn shops in the area and I did that same morning that my guitar disappeared. The pawn shop that sold my guitar was one that I visited that morning but he denied having purchased it. (Scumbag!) I never did find out who took it. We had to threaten to take legal action before the pawn shop would refund 'most' of the money to the guy who bought it, in good faith, from him.