Every person who bought a raffle ticket should be issued a full refund, because knowing an item was counterfeit would have prevented them from purchasing a raffle ticket in the first place.
Every winner should receive a genuine case that they were promised.
TAS should screw himself trying to get out of this whether he is breaking even or still making a profit. Who buys a counterfeit case for $300 and believes it is authentic? If he was too stupid to realise it then, he SURELY would have known when he received them and raffled them off anyway.
It would not matter if Richard Black delivered that cue in person, I would not deal with TAS because his actions are inexcusable. He has defrauded people repeatedly and has not learned his lesson as evident with this cue raffle, and now that he is still selling them on ebay.
As for PayPal, Do not let fear of losing these raffles deter you from processing your claim. They aren't going to give two craps and the raffles WILL be able to continue on. He is counting on your fear to rip you off and keep your money.
EDIT: I'm sorry, people, but this just makes me sick that he would take advantage of his AZB family this way.