Bitcoin and fraudulent transactions

I was reading Police suspect fraud took most of Mt. Gox's missing bitcoins, and its effectively claiming the missing 650,000 bitcoins vanished:

Of the 650,000 bitcoins unaccounted for -- worth about US$208 million today -- only about 7,000 appear to have been purloined by hackers, the newspaper reported on New Year's Day, adding that investigators have yet to identify who was responsible.

How does a bitcoin vanish? How can there be no record of the transaction?

Was this someone gaming the system with double-spending, or is this another attack?