I read an article a few days ago about how Rockstar Games is handling cheaters in their multiplayer format and they proposed a good idea, I'll paraphrase and edit a bit to fit Crpg's system.
Caught cheating, make them do what they currently have to do by posting for forgiveness. This is awesome.
In addition, make those who are caught unable to join battle/siege/duel servers for an allotted time based on their use and honesty in admitting it. They can play rageball, dtv, or on the private servers for a designated time.