I too was affected by these guys. Paypal will side in your favor if you say you never received any service whatsoever, unfortunately they won't have any money in their account to give you.
Do the following:
File an IC3 complaint at ic3.gov
File an FTC complaint at ftc.gov
File a BBB complaint at BBB.org
File a report with the sacramento PD at
http://www.sacpd.org/, use michael gibson's correct address at 1918 Alhambra Blvd, Sacramento, CA 95816, USA
I was able to locate Lee's phone/address by using the BT phone directory.
Tel: +44 (0151) 284 2455
13 Thorndale Rd, Liverpool, L22 9QP
Good luck.