How would a wrong payee receive business funds?

[luma7]

I ordered a summer camp from a local business.  They received confirmation from PayPal of my order, PayPal took the money out of my account; however, the funds were sent to someone other than the business.  The business said they can't do anything for me because they did not get the money.  PayPal is saying it wasn't fraud because I placed the order.

How would some 3rd party receive my payment when I was on the business' website and they received confirmation from PayPal?  How would I resolve this?  I have tried providing PayPal screen shots from the business where they did not receive the money withdrawn from my account and a copy of where they did get the order from PayPal.  Open to any suggestions?

[sharpiemarker]

@luma7 

Open an item not received dispute at the Resolution Center and escalate to a claim asap for PayPal to step in to review & decide the case. Whoever received the payment must provide sufficient proof of delivery of the summer camp service otherwise you get your money back.