Irrelevant if hoon laws where out or not, burnouts on streets were still illegal. But at least you did it and admitted you were an idiot, as long as you have learnt from it the I suppose it was a learning experience. Eagle eye hindsight is a beautiful thing ain't it?
But anyway this thread isn't about criminalising you. Yeah I highly doubt it was built properly for you to bust it. Even if you held it in 1st for a little bit to long it shouldn't of broken at all. You would need to hold it for some serious time to break servos, I'm assuming a decent build for that much money would a LEAST include a corvette servo, more likely a billet servo for that price. More likely to kill the engine by holding it on redline like that. This is why full manualising a gearbox isn't always smart, a normal tranny would have forced the gear change to 2nd.
Regarding the stolen part, I believe that tow trucks shouldn't be allowed to tow a car without the owner present, on police/council orders, or private properties (business) instructions. Bullcrap in my book.