What a story! And yet when you begin to look at the detail you can see how it might/could/did happen. I have certainly been around a few flying schools and charter outfits that have been hoodwinked by conmen - the good ones are very very plausible. I can think of two lessons to learn:
Do the paperwork checks before you do anything further. When I was involved in flying training and self-fly hire we would not begin to do even dual training without sight of the licence original;
If you ever get into legal difficulty, use FL as your barrister!
Incidentally, the CAA licences are a bit of a joke when you think of something like this - not even an ID photo. The only way of verifying that the guy with a licence in his sticky mitt is the "holder" of the licence is to ask him to show you his signature - hardly bullet-proof security! I hate passport photos cos I am so ugly, but it is the very lowest standard that seems acceptable.