Sold iPhone 3GS On eBay Auction

So here's the story.  I had an eBay auction up to sell my old iPhone 3GS. I specifically stated no international shipping.  Well someone in Russia did a BIN and paid right away.  I figured, well fine, I'll take the money and go do the CN22 Customs form and ship it by USPS.  Worst mistake ever. I have a CN22 form stamped by a USPS employee showing that I shipped the phone to this buyer's address in Russia.  Also you can use the tracking number and see it did leave the US.  So in other words, I did ship the item.  Well the snake in Russia says he didn't get the item and wants his money back.  Essentially we don't know if he did or didn't get the item. He didn't ask for insurance or another shipping method.  But we do have proof, which I sent to PayPal, that a government document was filled out and accepted by a government employee.  I showed them the CN22.  PayPal said they protect the buyer and took the money from me.  $228 and also I have no phone because I did ship it.  PayPal said if there was insurance, I needed to claim the lost item. Here's the problem, the shipped can never make a claim.  All carriers require the recipient to make claims when things are lost.  Which obviously he wouldn't anyway because he already has his money back and my phone.  So basically PayPal said they agree more with some Russian's word, than my word and US government document showing I sent the item.  I told them thanks, you just took $228 away from my 9 month old baby...literally I put him on the phone so they knew who they were screwing.  I'm done with PayPal.

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