OK, you said he verbally admitted cashing the money order. Once cashed, you will NOT be able to stop payment on that money order even if it was from the Post Office. In the letter in post #37 he states that he sent you A money order, not that he sent back the same one. When you talked to him did he still claim to have mailed you a refund or not? If so, when did he mail it? You should then allow reasonable time (assuming you have not) for it to get to you. I can fully understand your anger and you may truly be being ripped off but make sure. Once you are SURE of the fraud you might go to your local postmaster and see if he thinks there are grounds for charges of postal fraud which would be a Federal charge. Do not be guilty yourself of harassment and have as much evidence as you can when you approach the postmaster in a CALM manner. Nobody wants to listen to someone that is going ballistic.
Good luck,
Bruce