I understand that at one time, one of the major engine rebuilders for MB engines in the USA used to grind off the engine serial numbers and stamp them with his own. I can't say this is true for certain, but my restorer told me that story back when my car was being restored. So, it rings true with what you heard as well. I also understand that he stopped the practice because people would frown upon it.
I'd me more concerned with who did the engine rebuild, and when, and current state of condition than a serial number on the casting. Also, any papers to prove the rebuild?