Is it possible to fake an IP address so that the likes of Overture or AdWords can be fooled?

I have reported a possible fraud with the Police against Yahoo Search Marketing and they are going to look into it.

I am convinced that there will be a way to disguise or fake an IP address so that it shows that it is not coming from a proxy and is there for looking clean and normal.

With thousands of pounds up for grabs per day, there is without doubt motivation for this.