First of all, no theft or fraud has been commited yet. There is only presumption that it might happen. Having multiple accounts is not illegal and not against ebay rules, as long as they don't interfere with each other (you don't bid on your own items between accounts). So far you've got nothing to report to police but your bad feeling and internet hear say on what "people like that do".
Offer him full refund and tell him to bring the console back. Check the console is undamaged, same serial as the one you sold him, refund his money, via paypal, in front of him. Then blacklist his account from bidding on your items and list it again, make sure you go via end of auction fees refund form and file it under "buyer changed his mind" so there is record of it at ebay. Put it down to experience.