Scam?

Just to sum it all up in one spot quickly...I was selling two of my alpacas to a person by the name of Swansea Cole. They explained via email and relay service (which is a phone service for those using a computer or who are deaf and they type their message and an operator relays it to me and vice versa), anyway they explained that two alpacas were wanted for his children. The first email he mistakenly referred to them as puppies. He never cared which two I picked, what they looked like or even what their disposition is. I think that would be important. He says he lives in Washington and is currently out of state at work. He wants to send someone to pick them up. I was suppose to give the person to pick them up their funds for the service. I told Swansea Cole when everything was all clear that wouldn't be a problem. But I just had this FEELING that it wasnt right. Somehow Swansea Cole was going to try and pull a fast one. Today I received the payment that states:


Sorry for the delay in getting the funds. Now that you have it, take it to your bank and get it cashed immediately.Deduct your amount for sales and transfer the excess funds via western union money transfer to the name and address below.
Receiver: ADOMA SAMUEL
Address; 2131 Ofrod Road
City: LONDON WX 1 0LP
Country: UNITED KINGDOM
call +447758658328
Email: globashipping200@aol.co.uk

Once the transfer has been sent and been picked up by the shipper I would contact you to tell you the shipment day okGet back to me with the following information's once the transfer has been done
SENDERS NAME:
SENDERS ADDRESS:
MONEYTRANSFER CONTROL NUMBER

With these information it would be easy for SAMUEL to pick the funds up in any of the western union outlet in the UNITED KINGDOM, And please make sure the shipper is notified through this e-mail address above. once the transfer has been done so that he can schedule the pick up date immediately Once again, take the funds to your bank and get it cashed same day you receive it, get it cashed and wire the excess funds via WESTERN UNION same day because time is not our friend again.Please note that you will be asked to pay western union commission for sending money through western union, kindly deduct the commission from the excess funds too. Regards


Okay. Does anyone see the alarm bells? Where did United kingdom come from? His letter was postmarked from London with no return address. His cashier's check is remitted by John K Edward from the Associated Bank of Chicago. Who the heck is John K Edward? Swansea told me that the alpacas were being shipped to Washington. Okay, so if he's being ripped of totally for shipment he would be paying $500. Okay $1000. He sent me a check for $2550 over the price of the alpacas! To Washington? We paid less than $200 to have 12 alpacas brought further. In the above email he insists that I should cash it and then directly wire his "shipper" money before his check has ever cleared. Now everyone should be seeing the flags and hearing the alarm bells.
Should I cash this and see where it goes so I can report him for fraud? Or can I turn it all in on a hunch and tell him the deal is off? I mean how stupid does Swansea Cole think I am?