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I've had similar things with paypal where people have even gone to their credit cars companies & claimed they never authorised the transaction & I've had paypal & the credit card company find in my favour.
I think what you need to do is to provide documentary evidence to paypal that shows that these domains were in your name, that they are now in his name, & the time they were tranferred & how that corresponds to the transfer of money.
I think he'll find it difficult to explain why the goods were transferred into his name & why he hasn't returned them if he didn't initiate the transaction.
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