Alon, I feel for your Father.
In my carrer with General Motors I was assigned to the Hydramatic Division for a few years.
I saw transmissions fail in minutes while being dyno tested. Then in the field in thousands of miles.
No one can predict how long a front pump will last, your Fathers may be one of the few in many thousands of transmissions.
I know you are trying to help your Father, but I truely believe a dealer would not do somethig so obvious as tampering to destroying a transmission. It just isn't worth it at the reputation of his business.
The transmission may have been on it's last breath when your Father bought his Benz. You said he didn't put many miles on it. That in it's self is what you should never do when you have purchased as used car. Get it out and shake it down.
There are transmissions as good as what is quoted to you and at considerable less money.
Adsit Co. Inc. 1-800-521-7656 has a sale on this month. Also http://www.adsitco.com
Try them out, might help.
The best thing you can do to help your Father is to keep your Cool, don't put hard feeling into his head and the two of you get down on a very worthy Benz.
Happy Trails Beep Beep from Houston!!!
Donald, El Cheapo