London Welsh have been deducted five points and fined £15,000 for fielding ineligible player Tyson Keats.
A further five-point deduction is suspended until the end of next season and will only be activated if the club breach regulations again during that period.
New Zealander Keats, 31, has played 10 Premiership games for Welsh this season.
London Welsh are lodging an appeal against the ruling.
Welsh now go bottom of the Premiership, two points behind Sale Sharks, and they face an uphill battle to avoid relegation in their first season of Premiership rugby.
They have just five games left - away to Gloucester, Bath and London Irish, and at home against Northampton and Worcester - and are now favourites for the drop.
The case surrounding Keats was visa-related. The scrum-half joined the club in 2012, having previously played for Italian side Aironi.
Explaining their decision, the Panel of Inquiry said Keats applied for an ancestry visa when he arrived in the UK in July 2012 as his maternal grandfather was born in England.
But his application was apparently rejected and then team manager Mike Scott falsified a player registration form by stating Keats was English and had been born in Christchurch.
The matter was referred to the RFU by London Welsh once they discovered the background to the issue.
"We're obviously extremely disappointed with the judgement. I can confirm the club will appeal against the decision," London Welsh CEO Tony Copsey told BBC Radio 5 live.
"It's very clear to us the panel for some reason has really brought London Welsh to be responsible for one individual's actions (Mike Scott) and that's quite disappointing and obviously harsh. It's clear to us the club isn't responsible in this case.
"It's very clear from the ruling this individual has gone way out of his way to deceive both the RFU and the club, and it's from the club's internal investigation that unearthed the fraud in the first place and brought this to the RFU's attention. We feel very harshly done by.
"There's a case of an individual digging a hole for themselves and getting deeper and deeper into that situation. He went extremely out of his way to do what he's done on both organisations, and I think it's a shame a panel that's there to protect the integrity of the sport is punishing the sport itself."
Scott is the subject of a separate RFU disciplinary hearing relating to Keats' registration. He has accepted a caution from the police after admitting fraud by false representation.
The last Premiership club to be docked points were Exeter, who received a two-point deduction and £5,000 fine in April 2011 for fielding too many overseas players in a league game against Leeds Carnegie.
|12||London Welsh||17||4||0||13||6||17* After five-point deduction|