maximillianos - 4:00 pm on Feb 4, 2011 (gmt 0)
We have seen this work for our competitors for years. One did get busted a few years back. They had created essentially a link farm of sites. Fortunately they did a bad job of covering their tracks.
One anonymous tip to a high profiler blogger and they wrote about it. Next thing you know Google takes notice and they were ousted from SERPS. A year later their penalty is lifted and they are back in business.
Oh and this particular site also scraped tens of thousands of pages from competitors to seed their site. All their work got them very popular very fast and even a one year penalty can't slow them down now. With stolen content and a link farm they were able to acquire real links over a few years. During the penalty they clean up their act. Remove link farms. Remove stolen content. Submit a request to be re-added to Google. Finally get back in and now they are going up in SERPS like a legit site, even though they scammed and stole to get there and there is nothing anyone can do about it.
So moral of the story. Bad guys will always win. Even if G kicks then out, it is not permanent. They will cry their way back into SERPS and go back to gaming Google again and again.