1. Contact the appropriate venue admin.
Contact Etsy, Ebay, Paypal, Artfire, etc...
Even though almost 100% of the time, these sites don't do anything to punish the scammers, it's just protocol.
2. Contact your network on Facebook, twitter, blog, youtube, etc... and tell ALL of your friends and networks about the crime so that the criminal can be identify by many others. Your networks also includes your teams, forums, groups, and guilds online as well.
Heck, they should have billboards plastered with pictures of all of these criminals' faces instead of stupid ads that no one wants to see on the freeway!
3. Write to Etsy Entrepreneurs and we will post your story and the criminals who have committed the crime so that others may be warned and steer clear of these scammers.
4. Write to: http://etsycallout.wordpress.com/
Tell them your story and let them know. They have a wide network of viewers as well, so this will help spread the word.
5. Contact Regretsy.com
Tell them your story. Like etsycallout, they will help spread the word about the scam and con artist.
Any other tips, please comment so that we may all learn together. Let's band together and shut these criminals down!