Lisa, I can see how things must have looked from your end, and I can see your need to protect your billing system. All we're saying is that maybe you should do that little bit of investigating on your part, perhaps even disabling a webmaster's account while doing so, rather than labeling them as fraud and raising who knows which flags all over CCBill for it. If that flag is just within your own program and does not affect a webmaster's standing through out CCBill, that would be one thing btw. I am still not clear as to whether these things get logged on one's record in CCBill.
Useless Warrior here presented a most plausible theory, whereas Sheepguy's referrer ID comes as number 1 in Google search results for your site. Therefore, if anyone was trying to breach your security systems with stolen CC's using Google search for it (as your own logs indicate was the case) they are more than likely to be doing so using Sheepguy's codes, simply because he was doing better SEO than you guys.
It's not about knowing Sheepguy or realizing in advance whether this was an experienced webmaster or not. Now, I have not run a paysite or a program before, but wouldn't this kind of procedure be good: first cancel the transactions and suspend the webmaster's account for 48 hours or something, then contact them and tell them there is suspected fraud. If they are cheaters, I doubt that they'll bother denying it or even getting back to you. One thing is certain, they will not be trying it again with you guys. If on the other hand, you are dealing with an honest webmaster, you might just be able to get some credentials for them from other sponsors maybe, or from webmasters boards, and stop short of flagging their name for fraud in the system.
Again, this isn't about Sheepguy, to me (much as I love you, man!). It's about something that could happen to any honest working webmaster.
BTW. just because you've seen this 15 times before doesn't even mean they were all cheaters. Some of them could have been honest webmasters who just figured it would be easier to drop your links and forget all about it. And even if they were all cheaters, obviously it doesn't prove that the next one is a cheater as well. I'm saying obviously, because I think it should be clear even to you by now, that in this very particular case, you've hit on someone that is a totally honest webmaster.
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