Is it possible to trace fraud committed via a service the bridges banking and bitcoin? Consider the following scenario:


An individual, the "buyer" buys something online from someone else, the "seller". The buyer cannot verify the identity of the seller.
The seller wants money upfront before shipping and communicates bank account details to the buyer. The buyer trusts the seller because he assumes the seller can be identified using via the banking details if the seller should attempt to defraud the buyer.
However, the bank account is not a personal account in the seller's names. It's a service that will convert all incomming funds into bitcoin and sent them to a bitcoin address under the control of the seller.
The seller runs away with the money (bitcoin) and never ships the goods. The buyer attempts to track the seller using the banking transaction and finds out about the service used. The service operator discloses the bitcoin address (e.g. when law enforcement gets involved), but cannot provide any further information about the seller.


Is is possible to track down the seller using publicly available information from the blockchain?
It may be feasible to trace amounts sent to the scammer's address, but it would require a lot of work, mostly communication to strangers, to pin an identity to an address. This difficulty would be further exacerbated by the employment of green addresses, mixing services, or simple holding.

Bitcoin is pseudonymous, meaning that tracing is only as easy as the person being traced allows it to be. 

Bitcoin is not fungible, meaning primary that a "coin" is not uniquely identifiable. Rather, it's a distributed leger system, with value being subtracted from one account and added to another in each transaction. 

The only traceable entities are thus the accounts receiving and sending, and the only relation to the physical world in each transaction is an IP address. Given the employment of an anonymizing service such as TOR or a lower-anonymity proxy, tracing that IP address to a physical location with a person is highly improbable (if you figure out how, I'll bet you could make a lot of money from governments!)

If you're still up for it, BlockViewer may assist in the tracing.

As an aside, it's pretty safe to say that any BTC sent would require nearly Herculean effort to reacquire. It would most certainly necessitate the involvement of law enforcement, which has not likely yet been trained how to deal with digital currency investigations. This highlights the importance of a third-party escrow service or a personal relationship between the buyer and the seller.