If they can't handle the load, then they should just pass up the information to law enforcement and let them do the investigating and prosecuting of crimes made using their service.
Either one has to happen, but the current way they do business is damaging alot of lives. Something's got to give.
By the way, there is a Class Action Lawsuit being mounted against them for their unethical practices, like withholding funds from users or simply making unauthorized charges to the bank accounts of users and abusing their privilege of access.
Here's the link: http://www.freedweiss.com/PayPal-Holding-Money.shtml
Also, i called the District Attorney's office of Santa Clara County and they said that they get alot of people filling small claims suits against PayPal.
This is what happens when a company gets too big, empathy and respect for customers gets flushed down the sink :/