Wow, that's a horrible situation. On one hand he's your friend, but you also need your money back!

I had a problem with family once, a CC was taken out in my name, payments were NOT made, and I found out about it when the original $1,200 balance had balooned to $3,000. It brought my score down to a 560 and I paid it off. I never got a penny back and I couldn't press charges or file fraud, I just couldn't do that. It took me 3 years to get my score back to a 750.

I've also been reading some other guys posts about houses and money and other things and it's just a horrible time we live in right now. I'm a Civil Engineer with almost 5 years of GOOD experience and I've been out of work since Nov. 2008. It actually blows my mind to even say that. I've been working since I was 13. I had 2 jobs in college and have never gone more than a week between jobs. My wife is a vet, so we're OK with money. She lost her job in Nov 09 but got another one in Feb 2010 with a big raise over the last one. I may finally have a new job... for real this time... finger's crossed.

Keep your head up, pray for your friend, and I hope everything falls back into place for you.