I still think of c-rpg and strategus as two seperate things. I don't play Strategus myself, not belonging to a clan nor wanting to join one and I haven't heard that is supports Mercs.
I think a week or two ban in c-rpg would relay the proper message. I don't think the Strategus asshattery should automatically and necessarily bleed over into c-rpg battle/siege modes though. Isn't Strategus supposed to be about politics, reputation, smack talking, devious underhanded backstabbing and such? Like I said, I'm not playing it, so I could have the wrong impression. But to expound:
Strategus - Hmm. Sounds bad, but if I recall, don't you have to hire someone to be in a battle? Well, why did you hire him? I bet you don't do that again. His reputation is trashed, and so even if not banned he could never participate in another battle if nobody ever hires him. Is that right? And if he did it to his clan, his clan can handle that by booting his ass and then for sure he would never get hired. So...the mechanics for dealing with asshattery is already in place if that is the case.
Should we have some administrative ban as well? I would say yes simply to discourage that type of blatant action. But with game mechanics and reputation that could essentially perma-ban someone from participating in Strategus, I don't necessarily believe that an actual Admin ban should be implemented without cheating of some type happening. Reputation should handle screwing someone over. Maybe you guys need a list of people not to hire to fight in Strategus battles.