As a future consideration for any large purchases where anyone has to physically mail the payment, use a Postal Money Order. Anytime I get over $50 I use a PMO. I have to go to the post office to mail the check anyway, so what is a few extra minutes to get a money order from them. Private vendors like them better because it is as good as cash. For the buyer, it is a little safer, and depending on the amount a lot safer.
In a situation like this, there was really no mail fraud, the letter was sent and got to the designated address untampered (presumably) and was then the check was cashed. This is more outright theft. The USPS will say they did their part and was their hands of it (I've been through it with any ebay purchase). When you use a PMO it is issued by the post office, so now they are involved and you can pressure them into action. As and additional bonus, if you are warning the vendor about possible legal action for failure to comply, they are tampering with a Postal Money Order and now any criminal charges are Federal and not local.