London Welsh have had five league points deducted, a further five-point deduction suspended until the end of season 2013-14 and been fined £15,000 after being found to have fielded an ineligible player in the Aviva Premiership this season.
The player, Tyson Keats, appeared in 10 matches whilst not holding Effective Registration with the Rugby Football Union.
The case was heard by an RFU Premiership Regulations Panel of Inquiry consisting of Jeremy Summers (chairman), Mark McCafferty and Peter Budge.
London Welsh have 14 days in which to appeal against the decision.
"This was an extraordinary case and one that it is hoped will never be repeated," said Mr Summers.
"The sanction imposed was structured to reflect the seriousness of the matter, which included conduct that was dealt with by the police, but also to import a rugby-based proportionality to the overall position that took into account the wider interests of the game."
London Welsh have confirmed that they will appeal the ruling.
"London Welsh RFC are extremely disappointed with the decision to deduct the club ten league points, five of them suspended until the end of season 2013-14, and to fine it £15,000, in regard to the charge that the club fielded an ineligible player, Tyson Keats, in the Aviva Premiership this season.
"The case was heard by an RFU Premiership Regulations Panel of Inquiry consisting of Jeremy Summers (chairman), Mark McCafferty and Peter Budge.
"London Welsh can confirm that it will be lodging an appeal against the ruling.
"The club was unknowingly the victim of one individual's fraudulent conduct and it was London Welsh which discovered the fraud and brought it to the attention of the RFU. The Panel however has punished London Welsh on the basis that it is to blame for what that individual has done.
"London Welsh are hugely disappointed and shocked by the ruling made by the RFU Hearings Committee, which we believe is extremely harsh under the circumstances," said London Welsh CEO Tony Copsey.
"It is our belief the ruling is fundamentally flawed and I can confirm that the club will definitely be appealing the decision."