Send it back, jeez dude.

This one is easy. It's not like he stole the $1200 from you and returned it, he won it "fair and square" (if you call bad beats fair. lol)

I'd send it to him so that at least he can continue to play poker. Send it back to him, but don't feel bad about beating him out of his money down the road, if it comes to that.

If you are playing 10/20 then I'm assuming $1200 isn't a huge deal of coin for you. Send it back but don't tell the room. Just return it.