The NCAA has placed North Carolina's football program on three years' probation and banned it from the 2012 postseason, the governing body announced Monday.
The school already had imposed several penalties, including vacating all 16 wins for 2008 and 2009, reducing nine scholarships over the next three academic years and putting the program on two years of probation.
But the NCAA didn't stop at UNC's self-imposed penalties, finding that the school was responsible for violations including academic fraud, impermissible agent benefits, participation by ineligible players and a failure to monitor the football program.
"My only regret is for the current players, especially the seniors, who will not have the opportunity to compete for an ACC championship and go through the experience of a bowl game in 2012," new Tar Heels coach Larry Fedora said in a prepared statement. "We will do all we can to make every game this year a special experience for our seniors and fans."
According to the NCAA, multiple student-athletes received impermissible benefits totaling more than $31,000 and six players competed while ineligible, in addition to other violations.
"The university did a great job of investigating it," infractions committee chairman Britton Banowsky said in a teleconference with reporters. "They tried to get to the truth, and that's not always the case, but in this case it was clear that they did. ... Nevertheless, it was a serious case and we had aggravating factors."
Fourteen players missed at least one game in 2010 and seven were forced to sit out all that season, with four of those either dismissed from the team or ruled permanently ineligible by the NCAA. Among that group was defensive end Robert Quinn, defensive tackle Marvin Austin and receiver Greg Little. All three players were chosen in the first two rounds of last year's NFL draft.
"Obviously this has been a painful and difficult experience," North Carolina chancellor Holden Thorp said on a teleconference with reporters. "We don't like to have this kind of attention brought to any part of the university, especially one as visible as the athletic program."
The NCAA also issued a three-year show-cause penalty for former assistant coach John Blake, who had received personal loans from an NFL agent.
Blake, who was not identified by name in the report, was compensated by a sports agent for the access he provided to student-athletes, and failed to disclose the income to the university, investigators found. He was also cited for unethical conduct and failing to cooperate with investigators.
In 2010, Yahoo! Sports reported that Blake had previously been employed by pro football agent Gary Wichard's firm and had been wired money from Wichard's bank.
Attorneys for Blake said he received loans from Wichard, a longtime friend, but said there was never an arrangement to direct players to Wichard once they turned pro.
"We are very disappointed in the committee's findings and we disagree," Blake's attorney, William Beaver, said. "I'm disappointed in any process where the accuser is also the investigator, prosecutor and judge and jury. It's not reasonable."
Wichard died a year ago after a yearlong battle with pancreatic cancer. Blake resigned at North Carolina in September of 2010.
"This case should serve as a cautionary tale to all institutions to vigilantly monitor the activities of those student-athletes who possess the potential to be top professional prospects," the NCAA Committee on Infractions said in its report. "It should also serve to warn student-athletes that if they choose to accept benefits from agents or their associates, they risk losing their eligibility for collegiate competition."
School officials appeared before the committee in October.
The school fired coach Butch Davis before last season because of the investigation. Longtime athletic director Dick Baddour stepped aside so his successor could hire the next football coach.
"We self-imposed a number of penalties in the fall that we thought were appropriate based on the facts in our case. The NCAA has given us additional penalties, and the sanctions are more severe than we expected. The ruling is disappointing for our new coaching staff and our student-athletes," Thorp said earlier Monday in a prepared statement.
"We considered an appeal. But given the timing and the record that other schools have had with appeals, as well as the fact that penalties are suspended during an appeal, we've decided it's best to accept our sanctions and move forward."
New athletic director Bubba Cunningham said that although the last year and a half have been difficult for North Carolina, it's time for the school to move forward and restore its reputation.
"We can't guarantee people won't make mistakes in the future, but we can give our collective best effort to prevent a repeat of what brought us to this day," he said. "College athletics evolves daily and the high profile nature of intercollegiate athletics demands that we remain vigilant and accountable for the coaches, student-athletes and staff who represent our great university."
In its report, the Committee on Infractions found:
" A former tutor "constructed significant parts of writing assignments" for three players, provided more than $4,000 in impermissible benefits to players after she graduated and refused to cooperate with the investigation.
" Seven players accepted more than $27,500 in benefits, including cash, flights, meals, lodging, athletic training, admission to clubs and jewelry. One player received more than $13,500 in cash and gifts.
" The program allowed a former player, who was determined by the NCAA to be an agent runner, to have regular access to current student-athletes at its athletic facilities without any oversight.
Thorp fired Davis a week before training camp, citing the cumulative damage to the university's reputation by the probe. Davis has never been tied directly to or cited for any violation in the probe.
The day after the school fired Davis, Baddour announced he would step aside early from his planned retirement this summer so that his successor could hire the next football coach. The school hired Cunningham from Tulsa as AD, and he in turn hired Fedora from Southern Mississippi as the new coach.
Defensive coordinator Everett Withers served as interim coach last season and guided the Tar Heels to a 7-6 record along with an appearance in the Independence Bowl. Withers is now assistant head coach under Urban Meyer at Ohio State.
Information from ESPN's Joe Schad and The Associated Press was used in this report.