I posted a job out of despair, knowing it's illegal, due to time constraints and inability to complete the task within the deadline. I was grateful the freelancer empethized with me and accepted to do the work. The deliveries were, however, disappointing and didn't qualify to anything near the requested work. I requested a refund for the current milestone and the previously accepted(automatically, by upwork deadline) one and the freelancer disputed. I'm trying to resolve this by communicating with the freelancer, but he's insisting the work is up to expectations when it is clearly a fraud and exploitation of the situation.
I have a conversation with him proving him accepting the clearly illegal work, and I'm hoping I won't have to resort to this, but given I paid a considerable amount of money and have not received any of the expected work, what are the consequences for both of us if I submit that evidence to the dispute specialist?
It depends on what you mean by "illegal," but if the answer is "criminal," the consequences for you will likely be significantly worse than for him, as the person who solicited the crime. (Source: I'm a former criminal defense lawyer.)
In addition, there is no reason whatsoever to "submit evidence' in a dispute, because Upwork's dispute process does not result in a decision--they're there to mediate. To get a binding decision, you would have to pay about $300 for arbitration. The arbitrator will be an attorney and often a retired judge,