This person promised to give us a software product and we immediately wired him $20k and he sent us the software. It turned out to be pretty useless and doesn't work.
He now agrees to send the money back but has not made any progress in 1 year. We are getting paranoid and want to sue

We live in the usa

You sue in Court in HIS jurisdiction, not yours. If you can prove your case you will get a judgment against him.

Your legal fees may very well be higher than what he owes you.

Then an issue will be why you ordered this particular software from Spain, if it's illegal, if it's a copy, why?