Also called smurfing, in a nutshell, players form (with the help of friends and alts) numerous Arena teams in the same bracket and feed wins to one team. These teams queue at extremely odd hours to ensure that match-ups with the other teams they formed are certain. The teams play the required minimum of ten matches a week in order to qualify for points, although a recent marathon session seemed to have ensued in a last-minute rush for Season 2's Rankings. A quick look at the Vengeance Battlegroup's Arena Ladder will show seven out of the Top 10 teams coming from Mug'thol -- and reportedly not by the sheer awesomeness of the players from the said realm.
That said, it takes a fair bit of effort to raise a team's Arena Rating to higher levels. Starting with equal ratings, a team that loses 10 games straight will drop somewhere around 100 Rating points while raising their opponent's (assuming they only fight one team) by the same number. As the discrepancy between the teams' Ratings grows, the matching system will first look for suitable matches but, finding none, will eventually pit low-ranked teams against high-ranked ones. The returns are relative: a lower-ranked team losing to a high-ranked team will lose little by way of points while the reverse is true. It becomes necessary, then, to keep the Ratings of the pool of teams close together in order for points to be "farmed". This means making more teams to feed the teams that feed the top team. Did that make sense? This has resulted in teams of alts, or "placeholders" as one confessed win trader called them, with Arena Ratings in the vicinity of over 2500. That nets over 1400 Arena Points to spend on Gladiator goodness every week! For "placeholders", no less.
While some players have been crying foul over the clever use of the Arena matching system, the players from Mug'thol have been crying foul over the players from Hakkar, who apparently started the whole thing. In particular, one Biomojo, who was ranked 1st in all three brackets at one point, is credited with formulating the technique of creating a pool from which to advance his team's ratings. The players from Mug'thol claim that since the win trading done by the teams from Hakkar is upsetting the "real" Rankings and cheating those who rightfully deserve the top spot, they're doing it, too. If you can't beat 'em, as the saying goes, join 'em. It's an ingenious method of advancing Rankings; so ingenious, in fact, that a GM called it 100% awesome.
The players from Mug'thol make no effort to disguise their efforts and with screenshots of a GM condoning their 100% awesome technique, who can blame them? Then again, as Robin has pointed out, Blizzard isn't being totally passive on the matter. Sarcasm for the win? Does this affect your view of Arenas? How do you feel about the first 3000 Arena Rating being a result of rigged games? Who do you think Papa Smurf would choose to be on his 5v5 team? I'm betting on Smurfette.