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Wow, you are very lucky to have gotten your phone back. Even though you said you wouldn't, I would contact the local authorities (his).
If you let him off with just a slap on the wrist, chances are he'll never learn.
 
You did a great job getting it back, and kudos to Phillpost being on the ball about it.

Lucky the true credit card owner spotted it and cancelled the transaction quickly so you could get your phone back before it ended up in the thief's hot little hands.

So basically this guy hijacked the other guy's genuine Paypal account? Or did he actually steel the credit card details and set up a fake Paypal account and US address?
 
What you outlined is a common scam on Ebay. Worse, Ebay itself does little to help control scams. I am glad to see that you may work things out - good for you!
 
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