Gerald T. McCaughey Craigslist scam attempt Internet

I posted a wedding dress on craigslist and "Gerald T. McCaughey" e-mailed me and said he wanted to buy it and would send a money order or check including an extra $20 for me to hold it until the payment came in the mail. See e-mail correspondence below.

"Hi, Whats your full name and address so i can send you a money order or check for the agreed amount. Hopefully you will get it this week or early next week. Please reserve it for me, i do not mind adding twenty dollar for the delay. As for Pick-up, i already have an arrangement for that so wont be a problem. Get back to me ASAP."
Gerald (1st message)

"Hi Heather, Your payment has been sent but there is something i think i must bring to your notice immediately. I just discovered there is an error in the payment sent to you. My assistant sent the payment meant for another item thats more expensive than yours. I have called the post office to see if they could retrieve it but nothing positive. I really dont know what to do now. Please and Please, you can go ahead and cash out the Money Order at your Bank when you receive it, deduct your payment and send the balance via western union to the details i will provide you with. Can i trust you to do that for me?"
Gerald (second message)

My first clue was that he did not ask any additional questions about the dress and then I realized he was scamming when he asked me to send cash back to him. After I thought about it, I decided to research his name and found the articles on ripoffreport.com. I also found out that money orders can be counterfeit and this is how he pays. The bank doesn't realize it's counterfeit until after the person has cashed it. Thanks for the other reports to help make my suspicion clear. Don't let this guy scam you!

Heather
Roseville, California
U.S.A.