Google - Click Fraud - Are they realistic?

One of my clients has recently setup a new web site, he recruited us to sort-out his search marketing.

It was all going well, until the account was maxed-out by mid-morning. This led me to think that a competitor was clicking the ads intentionally. I examined the Web Logs and found a specific IP address that had clicked the Ad at 0230AM, he clicked the Ad about 30 times. Was was even more unusual is that this happened almost every morning at the same time.

We emailed Google with our complaint, however, after spending many days 'investigating' then denied that the clicks had come through the Adwords account. I assumed we may have difficulty with them, but that excuse hadn't come to mind.

I'll keep you updated.... [ I've gotta run to a meeting ]