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Was there any written agreement for the sale of the property?
Do you have proof of the payment of the money?
What do you mean by "extortion"? Is he seller threatening to harm you or break the law if you don't give them money?
Ok, I am sure you already realize it is a bad idea to give someone cash without any written agreement, so I will skip that part.
At this point, your recourse would be to file suit against the person in small claims court for a refund of the money you have paid under a breach of contract claim. The limit in NM is $10,000 and you don't need an attorney to represent you. The clerks will have the summons and complaint forms you need to file and can help with getting the sheriff to serve the defendant with the summons.
Then you just come to court with your proof of payment and tell your story to the judge. They will hear both sides, and I am sure the other person will deny you gave them any money, and then the judge will decide whose story is more convincing..