I think that's horrible as well but I do believe what goes around comes around so if indeed blogger B had malicious intent, it will come back to haunt him in some form. What a shame blogger A had to suffer because of that (assuming he told the whole story, as Sherif said.)
TxG, I don't think Google discloses what they track specifically (to prevent more fraud) but I would think it has something to do with IP addresses, number of clicks within a time period, etc.
I also read somewhere that Google takes into account how old your account is. They are generally more strict and monitor newer accounts much more closely but will give you a 2nd chance or investigate further if you've been around awhile and have no "strikes" against you. Not sure how true that is but it makes sense.
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