HRoth - 10:42 pm on Sep 9, 2011 (gmt 0)
No, he said that the transaction was canceled by accident by the bank, not that he disputed the transaction. He admits he made the transaction, according to the OP. This has happened to me, and the customer did pay and was not trying to rip me off. She had a terrible time getting her bank to pay it and finally sent me a money order (it was not through Paypal).
I would not be talking about contacting the police. That's overkill. Wait to let him respond to the payment request through Paypal. If he doesn't pay in X amount of days, send him a followup email or give him a call by phone. They have phones in other countries.