The most prudent course of action is to call UPS and tell them an item was delivered to you by mistake. That will take you out of any legal loop. It is unlawful to retain an item accidentally sent to you. You should make this UPS' and Pay Pal's, the original sender's and the original recipient's problem. Nothing good will come from you holding that package.
BTW, the wrong address scam is sometimes used to ship drugs and stolen merchandise. When the package arrives at your house the guys who bought the drugs are waiting to snatch the package. They either just grab it if it is left outside or ring your bell and ask if the carrier just delivered their package to you by mistake. They tell you they called the main office and that office told them the driver delivered the package to your address. This way there is no tracking of the actual drug buyers.