At the current time, there is no way to unlock 5.12 baseband. However, within the next update (3.2) which should be released pretty soon, the hackers famous for unlocking the phones claim to already Have a baseband crash exploit. A/k/a, they have a way/hole they can use to create an unlock.
So while it cannot be unlocked NOW, it WILL be able to be unlocked LATER.
What it sound like is the guy who you bought it from screwed you. He probably upgraded to 3.1.3, saw that the unlock didn't work, so he downgraded back to 3.1.2, re-jailbroke it, and then got rid of it as fast as he could.
He "swears" that it can be jailbroken? Frankly, he's full of $h!+.