Not allowing fake ads https://support.google.com/adwordspolicy/answer/6020954?hl=e... is different than allowing fake profiles to boost your monthly active user counts if your a social network.

Yes, but they have fairly comprehensive effort to prevent automated ad clicks - http://adage.com/article/digital/inside-google-s-secret-war-...

That sort of thing has nothing to do with the type of fraud in the article.

Boris Boris sells the contents of the iframe he bought on Doubleclick to Myspace (as "paid traffic"), which in-turn lets Myspace sell it on video exchanges.

Google don't care even a little bit about this, since they still make a fortune off the Boris's of the world.