I am seeking some advice on what I should do about this situation......

I found a small male dog on Tuesday and placed an ad in the newspaper on Wednesday to try and find the owner, but no one has called about it and today (5 days later) is the last day for the ad and I have found some one that is willing to take the dog and give it a very good and loving home (inside).

NOW - the problem...... I just found out tonight at 8 pm who the dog belongs to and yet this person has not called about the ad, nor do they take good care of the dog when he is in their presence (two other adults has confirmed this).
AND - when I found the dog in my yard, he was filthy beyond words, was covered in fleas from head to toe, and had ugly big knots all in his hair (as though no one was combing his semi long hair) - not to mention all the garbage and sand spurs I had to remove.

..... The QUESTION
If YOU were ME would you give the dog back to his owners to only have them not take care of him or to have them let him run free and possibly get hit by a car (or) Would YOU not let them know that you found their dog and still cont' on with your plans to give it away to a good home.

Thank you,
Rhapsody -