Do I really need to erase and reinstall the Hard drive?
That is a personal decision only you can make. Since I have no way of knowing what the criminals did to your Mac, nor what Apple did in an effort to reverse those changes, would be imprudent of me to recommend otherwise. If I were to take possession of your Mac though — and if it was no longer considered evidence in a potential criminal proceeding — that's what I would do.
Pursuing criminal charges against the scammers is also a personal decision only you can make. These scams can arise from anywhere on Earth, by anyone possessing (or even renting) a telephone and a computer, and are usually beyond the reach of your local law enforcement's authority to act. Among actions worth considering is filing a complaint here: https://www.ic3.gov/default.aspx