The best idea with this sort of situation is to report them to the Federal Trade Commission, if you are in the USA. They will not do anything about individual cases, but they will take record of the claim and look into it, and give you a case number, and when you post things like this and find a bunch of people who have seen the same scam, by the same person, have them also call the FTA and cite the same case number. Keep copies of all emails exchanged with the people, and take screen shots of the ads when possible, or be able to give the FTA links otherwise - that gives them the best possible chance of actually tracking down the people responsible for these false ads and stopping them from doing what they are doing.
I had to go through this process a while back - entirely un-horse related. I had a rental property available I made the mistake of advertising on craigslist. The ad got stolen and reposted all over the internet - fortunately the fools just cut and pasted my ad, including phone number and email address so I caught on quickly. These people were advertising a house - MY house - for rent at half the price I had advertised it, claiming it had all kinds of ridiculous features that didn't exist (like a mountain or ocean view. This house is located in flat, land locked INDIANA.) The people who sent responses through craigslist got a similar BS story, and claims to send the deposit and they would recieve keys from the UPS guy (seriously?). It took four months and many calls to get them all shut down and the fake ads to cease - that was two year ago, and even now I get the occasional odd phone call and have to go search for another ad.