Whoever you spoke to at the shelter is WRONG. If you find a lost dog it is just that LOST. There is a legal length of time the dog needs to be held prior to being placed for adoption. Do you know what the time frame in your area is? The shelter needs to follow the laws on the books regarding lost dogs. Usually it is somewhere between 3 and 5 days.
What shelter is the dog at and what township is the shelter located within? From your time frame it seems that the dog was only at the shelter for less than 24 hours.
Regardless of what the neighbor of the owner threatened to do to the dog (what to total POS this guy was) the dog was lost and from your time frame less than 24 hours. The owner has a right to claim it within the time frame set by law. If it is not claimed within that time then yes it can be adopted out.
I am so sorry for the accident the happened how horribly tragic they are going through this.
Then to add to the situation this happening to their pet.