<< arrested for what?
it is a scam, but what part is illegal?
i am not being a smart ass, i really want to know the legality of it. >>
Peddling without a license. most likely. I can tell you exactly how these scams work. Maybe you've been approached by one of more guys selling stuff out of the back of their car/minivan/SUV. Maybe tools, speakers, even art. The pitch varies but it's always the same basic premise - they want to sell them to you for "a lot less than they're worth." Sometimes they produce phony "receipts" or other "proof" of the items' values - just something they printed from MS Word. I'm not a lawyer so I don't know if misrepresenting a product's value breaks any laws. But soliciting without a license is illegal in most places. And not reporting sales tax is obviously not too cool with Uncle Sam.
So where do these people and their wares come from? They usually have a small office/warehouse where a bunch of them meet every morning. The merchandise isn't stolen - it's just very cheap junk bought at wholesale. They load up their vehicles and set out to sell the stuff. They'll travel anywhere up to an hour or two, usually try not to hit the same area two days in a row. Then they just hit the streets and start looking for "goobers." That's what they call their customers. They sell what they can and head home, and do it all over again the next day.
These people are recruited in newspaper ads promising "$500 a day if you can do the work" and are led to believe they're interviewing for legitimate jobs. They usually show up in business suits. Then they're hit with the pitch - sell this junk out of the back of your car and make $100-500 a day. They pay a fixed price to their employer for the merchandise, and whatever they can sell it for over that is their profit. They use whatever sales pitch they feel like. They'll tell one person it's overstock, the next person the stuff it "hot" -- they'll just tell you whatever they think you want to hear in order to get you to buy it.
How do I know all this? Well (hangs head in shame) I was one of those guys selling junk out of the back of my car many, many, many years ago (I was 18). In my case it was tools. All made in Taiwan/Malaysia/etc, all extremely low quality. A set of wrenches that I'd pay $12 for from the company had a "retail price" of something like $59.99 printed on the package. I'd sell them for $20-30 ... whatever I could get. I was never any good at the job and quit after a couple weeks.