He's obviously having you!

1) unable to provide a trackingno.
2) unable to retrieve engine
3) unable to transfer money
4) unable to insure over 500 pounds
5) empty envelope arriving

Informing the Dutch police will get you absolutely nowhere at all as they'll tell you it's civilcase and not for them.
Your best bet would be sorting him out in person I reckon...

I hate to say I told you so (because I didn't) but it is a daft thing to do: sending 1500 quid over to someone you don't know and without any references.
You can go over to England for just a day so easily so that would have been much safer....where did you think he got the name 'DemonDave'???

It's probably not for helping old ladies across the street...