Something like this happened to me once.
I sold tickets on Ebay, met in person to exchange tickets (so there was no tracking available) and then I had a claim filed against me saying that the person had used a stolen credit card. It turns out the card was her mother's and she didn't ask permission.
I tried to fight it, but ultimately they took the money out of my banking account and stuck me with a gay $10 penalty fee. I called the girl and fought with her time and time again until she agreed it was her fault and would send me a money order to pay for the costs (she never paid me back the penalty fee). I cashed the check and 100000 months later when paypal closed the investigation, somehow I won the case and my money also got refunded back to me! So now she's paid me twice. I kept the money She hasn't come looking for it and if she does, I'll refund it back to her minus the penalty fee.
Good luck though. You're gonna be fighting this for a looooooooooong time. Paypal is freaking slow with these cases. Hopefully a lot of money wasn't involved.