DDA property-fraud case?

So I am asking this question on behalf of my parents. Both of them are now 65+. My father had applied for a state housing scheme in 1980's. The draw of lots was long awaited. in the meanwhile the housing board came up with another scheme in 1990's and my mother participated in it. Luckily we got in on the draw of lots and got a lovely flat. As a regular middle class family we never thought of surrendering the lot papers of the 80's scheme. Cut to post 2010, the housing board announced lots for the 1980's scheme and my father got lucky. since we could not afford to spend the money they were asking for the demand note we decided to sell it off to someone. The deal was done but the property was still in my dad's name. The first installment had been paid to the housing board. Then one fine day a gentleman shows up at our doorstep and says that we have got a case/enquiry in our name since we already had a housing board flat and got another one (We knew we could not do that as per the rules but it happens all through the state and is very common. We did not expect any such repercussion) We panicked and made him talk to the guy we had done our deal with (we are regular middle-class folk and get very scared by anything of this nature)We did not even see the file he was carrying. After getting of the call the guy left our place. Now the guy we had done our deal with calls and tells us that he is paying them off and letting my father off a fraud case(he said there are 3 cases...one of which is fraud). They are asking for a sum more than what we were supposed to get by the sale of flat. We are in some serious trouble here....neither do we have the money to pay them and this was my parents' life savings sort of thing. Please help me out.