RightCoast, thanks for the Attorney General tip. I hadn't thought of that. As for not having a "ford" problem, I would have agreed initially, but after my wife spent an unsuccessful four hours trying to get even the most basic help from Ford Motor Company I feel pretty comfortable adding the whole operation into the problem category.
Lacarnut, I believe someone at the state department of revenue suggested calling the licensing board. She tried calling them around 3:00 this afternoon and couldn't get an answer. She says she will try them again tomorrow. Oh, and the nephew does not have the original title.
RightCoast, car 1 was traded. That is the one my wife's name was on and still is as far as the state of Georgia is concerned (as of today atleast). Her name is not on car 2, but the dealer did apparently sell it without clear title. The nephew has been making payments on car 2, but here is the good part. He had the payments on car 1 (the original vehicle) coming out of his bank account as an automatic draft. They were still drafting his account 2 months after he traded the car. He was finally able to get all but $50 of that money back. I don't know what happened to the other $50.
For the record, except for digging up phone numbers for my wife on the net I've tried to stay out of this because it is her sister's son, but the time appears to be drawing near for me to make a visit to the dealership. After all, I haven't said the word "attorney" to them yet.
Frankly the entire situation has me somewhat confused. I've traded and purchased many vehicles over the last 20 years and have never encountered any thing like this before.
It has been good talking to you guys about this, and I do appreciate all of the suggestions. I'll try to give an update tomorrow afternoon.