I think you mean Adsense? That's the one where you run ads on your site, and Google pays you for clicks. Google will indeed close accounts due to click fraud. Basically, if the ads that are running get clicked waaaaayyy too much, Google freaks out. It appears to not have hard limits, but rather to be relative.
So it's not like once click-throughs hit 5% you're banned. It's more like this: if your site traditionally averages 2% click-throughs, but over the course of a few days it rises dramatically, Google will (automatically?) flag that as out of the ordinary, and probably close the account. The thinking is that established patterns shouldn't spike too hard. So if they do, odds are that someone is manipulating something.
Google doesn't really blame the site owner. Often, it isn't the owner who is at fault. It's often friends & enemies. For example, if you compete with another site, the owner of that site might come to yours and click on a ton of your ads just to spike it, get your account closed, and starve you of revenue. Or in my case, my MOM thought that coming to my site each morning and clicking on a handful of ads was a good, loving thing to do. Of course, I freaked out. "Please don't get my account shut down, mom!"
But I love her for trying, of course.
-Tony