I have a subcontractor working for me and he sold a product to a customer under his company name. The customer claims to not have received the produc

Since this involves a transaction to which you are not a party and which is apparently outside the scope of your relationship with this particular customer, it seems that this is a narrowly circumscribed problem. Assuming you have some economic "clout" with the subcontractor, you can refuse future business to them unless and until they take care of this problem to your satisfaction. Short of that, you can demand written proof of delivery of the product. At the end of the day, you have to decide how important the customer is to you. It may be worth your while to pay off the customer and then seek recovery from the subcontractor. That's a business judgment for you.