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I've been paying affiliates via paypal for years. Even before I was with Swurve, while working for more hardcore adult dating properties.
There are things you can do to fly under the radar. It is possible, but my huge issue has always been it's not reliable. Paypal will never be an Epass replacement. Their system flags large dollar transfers, especially large dollars going from the US to overseas. I don't know where their line is drawn, but once you raise enough red flags they launch an investigation. During their investigation, which takes from a few days to a week, they lock the account and freeze the most recent funds sent, which can cause some webmasters paypal balances to go into the red as it locks their money as well.
I've never heard of them not releasing funds though. Every investigation I have been able to resolve. If you receive an email like the one posted above, it seems they would have to return the cash to one party or the other?
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