Not refundable? So he is giving it to you?

Involve the law? INVOLVE THE LAW? That's kind of like using the words lawyer or sue in a business dispute.  Everything stops right then and there because of the threat and both sides start arming for battle.

You need to arm yourself.

Do not.  I repeat in big letters DO NOT send him any money in any form at this time.  Because indications are it is a scam.  If it is legitimate he is incredibly naive stupid.

Is your PayPal linked to a checking account?  If it is go to your PayPal account and change your password, unlink from your bank, anything that you can do to limit access and isolate PayPal from your money anyplace else.

Go talk to your banker NOW. In fact, don't take the time to go there.  Call and talk to someone who has authority to do something now. You want to make sure they have not somehow gained access to your account

Consider setting up a bank account just for PayPal to link to that you barely keep above the minimum requirements. Only mov money out by paper check. No transfers, no link to other accounts.  Maybe even a different bank than you use for everything else.

Be proactive because by the time you can react it is too late.