Holy crap!
Gotta admit though, as far as excuses go, getting arrested and charged with possession of a stolen vehicle, possession of stolen license plates, felon in possession of a firearm and ammunition, and felony eluding with injury, all make for a good "excuse" for not shipping out a knife.
I'd get ahold of the PD if you're able. You have records of the transaction, and if he can't provide records of making good on his end, there may be some recourse available to you. Or at least add wire fraud and mail fraud or whatever applies to his list of charges. I wouldn't hold out much about getting money back from him though - he might have more serious things on his mind right now.