who do i report false advertising to?

[Jake]

You have to fend for yourself when making one on one transactions through Craigslist, which has no seller rating tracking system like Ebay, it sounds really dumb that you didn't test the thing before handing over your money, buyer was not beware?
The worst thing that can happen is being sold a stolen item, perhaps with tracking software that allows the authorities to find it in your possession.
I am not sure that the police would even act on this, it may be more of a civil matter that would typically be handled in small claims court, which after fees everyone might be losers. Since they are not an established business, you probably can't get them for violating any advertising regulation clauses, if they were a retail store not delivering on their ads you could complain to FTC.gov, or maybe report them to the numerous scam registries on the internet.