Why cant beis din make the 5 people that are claiming that it is their money make them swear. wouldn't this solve the issue, since not everyone would be willing take an oath given by beis din.
1) In fact the Halachah (in Shulchan Aruch, Choshen Mishpat 365:1) is that each of the 5 take an oath and the thief has to pay up the full sum to each one. This is because the Halachah follows the view of Rebbi Akiva. The Gemara does not actually state that according to Rebbi Akiva all 5 take an oath, but the Rosh here (#8-9) states this. The Beis Yosef (365:1) writes that the reason why they have to swear is that, according to the strict letter of the law, they should not receive any money at all. However, the Chachamim gave a fine to the thief because of his transgression. It is not correct to impose this fine if the claimants do not swear.
2) All of the above follows the opinion of Rebbi Akiva, but I understand that your question is on Rebbi Tarfon's opinion. It seems that Rebbi Tarfon does not agree with the above reasoning, as the Gemara states that in a case of doubt one cannot take money away from the thief. An oath is not a good enough proof to enable us to take money away from someone. Two witnesses are necessary to take money away from someone. If more than one claimant was to swear that he is owed money, one could not take money from the thief to give to the claimants, since he clearly only stole from one of them.
Kol Tuv,
Dovid Bloom