Simply from your quotes alone you can see the confusion in this whole debacle.
From what I read he wasn't sure how he paid, he knows he paid through the website but doesn't know if it was via paypal or via card. To that end he has contacted Paypal asking them to look into it to which the response was that they couldn't find the transaction. That alone is mental to me, to not know how you paid over $1000 to someone is just mind boggling.
Find out what was paid, how it was paid and when it was paid. Submit that information to MVP. If it was indeed a credit card, contact the credit card company and make them aware of the situation. If it was Paypal, ask for a refund via the system and let MVP know that you are willing to accept.
I genuinely believe there's a language barrier here as MVP seem to be under the impression that it was paid via Paypal whereas you do not, and your conversation with Paypal, if understood correctly, would agree. Get the facts straight then take it from there. The he said/she said stuff is irrelevant at this moment in time.