XJ - since a person that has stolen a domain has control over it , he can list it on any site to sell it ... while the escrow transaction would be secure , the domain actually would be stolen ... even though the buyer would have been scammed too (and out of money) , since domains are unique and rather easily traceable to the original owner , it is common practice that the domains get returned to the original owner and the buyer then tries to find the scammer to get his money back ...
in many cases , some checking before a domain purchase is advised ... for example (but not limited to) a simple Google search of the domain (maybe together with the word stolen or scam) might turn up some results if the domain is stolen and reported/mentioned somewhere (eg. a forum or blog)
xrvel - "better safe than sorry"