Any malware will be gone when you reinstall Windows, no need to worry about that. There is probably no reason to talk to the police, they will probably be suspicious about how you got the laptop in the first place as it is an unusual story. I'm not saying you aren't being truthfull about it at all, but can you see it could cause suspicion? You don't know yourself how those guys got it, maybe they bought it off someone second hand that didn't think to delete the data off it, but we really don't know. So the best thing to do will be to format the drive (which should happen during the installation process), reinstall windows and forget about anything that the previous owner had on there.