Don’t get nasty, we’ll get our Proud Police Uncles on you. - Sorry couldn’t resist.
More seriously, there is no doubt that you have received extremely shoddy service here. Also, you are correct, every seller like this makes the entire platform suffer in terms of reputability. Sadly, however, for every seller like this, there are also unscrupulous buyers who constantly attempt to get free work or slander sellers who will not work for $5 to complete excessive amounts of work.
In this case, calling out either buyers or sellers on the forum by name is not permitted. If it was, it would demand an entire extra set of full-time people to go though every such complaint to ascertain it’s validity or not.
Thankfully, what you can do is open a ticket with Fiverr Customer Service. If as you suspect, your seller was logging in from a false IP address, this in itself could land them in hot water. However, Fiverr will also take your complaint regarding the quality of your work very seriously also.
That said, as far as suing Fiverr goes, if you decide to do this, you might want to think about venting your frustration a little more civilly here first. The amount which you have paid, is after all, due to be refunded as per Fiverrs terms of service (as credit and as you agreed to any refund being paid when you signed up). In like regard, if you have opened a paypal dispute, there shouldn’t be a problem with you getting your money back as cash.
Sorry you had this experience. Please don’t take this out of context though, and mentally align Fiverr with the center of all evil in the universe. This kind of thing happens occasionally with any online transaction. In fact, I just lost $20 on Ebay and am similarly peeved. I’m just not quite sure that I’m ready to start suing anyone or start a one man crusade to bring down Ebay, even though unlike you, I haven’t got my money back yet.