well, sometimes you get what you get when youask the police for legal advice.
I would have to do some research (you could as well) in your states statutes to determine if the trasfer of the bike required the ability to be able to transfer title. I would actually guess that it is a requirement.
If it is, then your friend did not have the legal right to sell the bike to you and owes you for the loss. He would then have to go after whomever sold it to him and on and on.
In that situation, prior knowledge would not be a requirement.
in a different way about this, your friend could not possibly have any right to sell the bike to you since he could not legally own it because it was stolen property regardless of the need to be able to transfer title.
In either case, I believe you do have a claim against the guy.

