engine break in

I had something similar happen a few years back and PayPal didn't want to care. I submitted a mail fraud compaint to the FBI's online fraud department, and within a few days the Attorney General's office in my state was in contact with PayPal, and it was taken care of quickly.

Make sure you mention "mail fraud" and "FBI" to your awesome relative lawyer when you talk to him and see what he says.

A delivery confirmation just means that they dumped it somewhere. Contact the USPS and have them trace it. If they won't, refund the money. You screwed up.