There was a registry set up to prevent reselling flood damaged vehicles, Insurance companies were supposed to report the vins to warn potential buyers. I cant seem to find the site anymore so I dont know if it was turned off or my search skills arent good enough.
The real problem is it seems he knew the vehicle was flood damaged prior to purchasing and was gambling, flood damage is a gamble I'd never take even if I knew it was a fresh water dip, to many hidden issues not just in electrics but hidden voids in the vehicle that have no corrosion protection, I've seen vehicles rust from the inside out even after fresh water dips.
As was pointed out the only good and correct repair for this issue is removal of all electronics and replacement. The problem will haunt this vehicle like a ghost forever, corrosion inside panels, grounds and electrical connections with corrosion, wires falling apart, it's really only good for parts and scrap, and you have to choose carefully which parts you want to reuse.