Lots of ways. They could request images from the prototype.
Three letters - NDA. If Mu couldn't show the backers and their excuse was NDA, why would they show IGG?
They could request proof that all questions from backers were answered, or that all refunds were issued.
AFAIK all requested refunds were issued in due course. This helps Mu's case greatly in IGG's eyes I'm sure.
They could set a deadline for posting an update.
It sees they did, and that is rumored why Mu gave the last hurried update.
Or they could just put the burden on Mu: prove that you are not fraudulent.
Err, sorry, no, that's not the way it works. Innocent until proven guilty.
Once again, you can't go and suspect fraud just because a very small percentage of backers claim that. You need some very good evidence.
I'm not sure about that, it depends on the details of the contract. However, continuing with the hypothetical, if IGG had reason to suspect fraud, and Mu did not refute it, it would be IGG's duty to at least pull the project page and refund their commissions.
Sure, but because IGG never ever say anything, you don't know what goes on behind the scenes. Perhaps they asked some question and were satisfied? You just don't know.
What if it came out in discovery that 100 people had written to IGG saying it was fraudulent? As I said, they would have had a duty to investigate.
Sure, but it's hugely more likely that it's only a few people. Because a) Apathy, b) They want to believe the dream, and c) they don't want to admit they were duped.