The whole point about this quest is to incriminate the Dawnguard for a murder inside a random town and while I was really mad about having to do it, I picked as useless an NPC as I could, I used my disguise and planted the letter and killed him in the open, textbook kill.

What bothers me is that I still have the bounty, somehow despite my disguise(the helmet of course covering my face), people know my exact description, and everyone knows the exact person who murdered the poor ol' merchant.

So do they think i'm a member of the dawnguard even without my bulky disguise? Didn't have to deal with this in Vegas.