I have a 1968 Camaro SS . block casting number (3935440) matches vin. engine stamp number matches vehicle vin but has an XG OR XC OR XQ suffix. Is this fraudulent or could this be a mistake? Thanks1

 

That casting number is a 1968 396 used in the Chevelle, Camaro, Nova and passenger cars (that's good).
What do you mean by the 3935440 casting matches VIN though? That's not a "matching numbers" number, the partial VIN stamp is.
Of the three "X" suffix codes you gave, only the XG is a hit, but that's a truck engine code.
The 396 suffix code possibilities for a 68 Camaro are: MW, MY, MQ, MR and MT. Any chance you're misreading the XQ and it's really an MQ?

 

X is Truck engine.
Could you post picture of the code for the experts determining if it is a restamp?

 

The digit that is after the X and hanging lower looks to be the same style (depth and thickness) of stamping, and GM had been known to have sloppy/misaligned stamps once in a while. But the other stuff right after that isn't right, and some numbers are upside down.
The block casting wasn't one that was used in trucks, which is part of the mystery. But there is no disputing that X code, which means "truck engine" plain and simple.
I'm going to say you have a truck engine, where for whatever reason GM used that block casting instead of a designated truck one, and a previous owner, or engine rebuilder, stamped those other numbers (rather sloppily) onto the pad.
That's my opinion anyway, others may vary.
Also, look to see if your block has a number pad in the center, above the timing chain cover, or a vertical pad on the drivers side, near the bellhousing and above the oil filter boss. Some blocks had those.

 

I'm not finding any application info showing this casting number was used in a truck. The casting was used for more than one model vehicle as mentioned earlier, so who's to say it wasn't put in a special order truck with a hi-perf 396.
The suffix code (X? in your case) is stamped on the front pad when the engine is assembled. The code tells how the engine is built and what vehicle it went into. X = truck. The rest of your numbers have been messed/tampered with. Looks like somebody waled on the pad after the X with who knows what to cover up what was there. With a truck code, it can't be a numbers matching engine.
This sucks, as you were led to believe it's a matching numbers car. Did you not look at the numbers before buying?