Well....A WOW license (probably character) is not worth $1000...so your wife's daughter's boyfriend isn't out of pocket. (Isn't your wife's daughter...your daughter too??)
WoW can be bought for $30, then you pay around $12 a month to continue playing. What your dude was trying to do, most probably, was sell his "levelled" character (probably a level 70) for big bucks. It's kind of like selling your "work" at levelling a character. So, he's not really out of pocket, except for what he payed to play.
Unfortunately, it's his own fault. You never send details until the payment clears (which is why paypal says "uncleared" next to the transaction). Will be interested to see what paypal can do, as they did what they were supposed to. Keep us updated, please.