Theft of mortgage property

I purchased a car from a dealership and have been unable to make any payments. My initial down payment was returned by my bank. The saleman became a friend of mine and when he told me the check was returned, I gave him cash to cover the down payment. (He was later found murdered by people he owed money to) and the dealership claims they never recieved the money.

I have not kept in touch with the dealership except to tell them I gave him the money which is how I learned of his death. It has now been 11 months that I have made no payments because of my job situation. They are claiming Theft of mortgaged property. Can I just return the car to them?

What are my consequences?