huge misconception of the clunker program... the engines were seized per the conditions, however there was no real asking for the ruining of the vehicle... just making it undriveable and therefore undesireable...
the government labeled these cars as "ruined"
if you can find me proof of where it says "car must be crushed" then i'll retract my statement, but i've found no such thing.
and yes, it is possible for a B5 to be in the junkyard. do not forget that vw had the EARLY b5's out in 97' badged as a 97'. they are just so rare to find because they had already had all their failures and problems before then

it's entirely believeable to see this in the yard.