Why not someone tell this guy they don't have a Paypal account, and ask if you can just send him a check instead. If he bites and actually gives you an address, you can act real surprised and tell him that you have a real good friend that lives near him, and instead you could simply have your friend stop by to drop off the cash for you and pick up the card at the same time. See what he thinks and says to that. And if he still plays along, you can actually try to get him to give you a time for your friend to drop the cash off.
Now if he hems and haws about not wanting to meet someone in person, you can reassure them not to worry, your buddy just happens to be a local cop so he should have no qualms about meeting up with him.
Hopefully that will get the point across!
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