In my experience, they're stealing work from other artists around the internet and posing it as their own. This has happened to me on more than one occasion. They find these images that are already done, and they incorporate them into the final project, or they sell them as their own original work.
I was actually dealing with one "artist" who made me a logo I asked for, which was loosely based on the concept of another logo I saw on someone's page. They had the hardest time doing it, after telling me they could do it. It took forever and a day to get finalized. And then, probably a week later, I was searching for another artist to do the next part of the work I needed - I saw the original 'example' image I had sent to the artist I worked with, uploaded to ANOTHER artists portfolio page. The page with what's supposed to be their original listed works. I know it was my exact image because I had altered it myself as I'm a tad bit proficient in PS. I just wanted a true graphic artists flair added to my final product. So a large number of these 'artists' are networked together.
Another time, I paid almost $200 for some backgrounds I planned on using for some green screen projects I had planned. It was supposed to be done in a short time, like 3 days or something like that. It took over 2 months... 2 months. And a good many weeks after it was finally done, I found myself researching on the internet for information on one of my upcoming topics, I ran into this background this artist clearly sold to me as an original work - and it was a lesser known original piece of wall art ... from an historical museum somewhere in another state. They took the picture - an oil painting - and made my background out of it thinking it was such an obscure piece of art no one would ever know the difference.
And Fiverr doesn't let you follow up in any way. Once you give a rating, that's it. Reporting fraud isn't really an option. I've read countless complaints from people who have had experiences very similar to mine, sometimes more expensive than mine.