Memphis must vacate its NCAA-record 2007-08 season and serve three years' probation because of NCAA rules violations, the NCAA committee on infractions announced Thursday.
Under former coach John Calipari, Memphis won a record 38 games that season and reached the NCAA championship game.
Memphis president Shirley Raines said shortly after the NCAA's announcement that the school is appealing what she called an unfair penalty.
"We know the rules," Raines said. "We did our due diligence. We did everything we could to determine the student-athlete was eligible and that the rules were being followed."
In May, the NCAA accused Memphis of several major infractions under Calipari, including a fraudulent SAT score by a player, later revealed to be Derrick Rose, and providing close to $1,700 in free travel to Rose's brother, Reggie.
Paul Dee, the chairman for the committee on infractions, said in a teleconference that even though Memphis was not aware of Rose's questionable test score until midway through his freshman year, once the score was invalidated by Educational Testing Service, Rose no longer met the initial eligibility standards.
"This is a situation of strict liability," Dee said. "If he is ineligible and does not meet initial requirements, the penalties are related back to that time and a determination is then made: Did he play in any contests after the fact? In this case, he did."
Calipari was not penalized because he was never included in the original notice of allegations, Dee said. But Dee did stress that vacating the record books carries with it an implied punishment.
Calipari is the first head coach to have vacated Final Four appearances with two different schools. His 1996 Massachusetts team met the same fate because of NCAA rule violations, even though Calipari was not implicated in that instance, either. Memphis also suffered the same fate in 1985, when it was stripped of its NCAA tournament appearance then because of rules violations.
"I'm very disappointed and disheartened by the NCAA's findings," Calipari said in a statement. "I fully support the University of Memphis' appeal and until that process is carried through to its completion, I will have no further comments on the matter. I am anxious to coach the team at the University of Kentucky beginning this fall."
Dee said: "Whenever records are vacated, that is a strong indication that there was a problem. Because there were no allegations against the coach, we did not consider any, but whenever you have a situation that affects a team's record or an individual's personal record, it will have an impact on that individual."
Though hit with a failure-to-monitor charge, Memphis will escape a postseason ban or loss of scholarships.
However, the university will be on probation until 2012.
"That means the university is on heightened review," Dee said of the probation. "Probably the most important thing about probation is once a school goes on probation, if they commit another major violation within five years, they are subject to a special review and substantially harsher penalties."
In addition to the lost season, Memphis must return to Conference USA the 2008 NCAA tournament money it received. The Tigers' Final Four run ended with an overtime loss to Kansas in the championship game.
Memphis also will be prevented from receiving future shares doled out in the conference's revenue-sharing program -- a total loss estimated at $530,000 on top of the $85,000 already paid by the school. If Memphis loses its appeal, athletic director R.C. Johnson said approximately $300,000 in bonus money Calipari earned from that season would be paid back.
Josh Pastner, who did not have knowledge of the NCAA investigation when he joined Calipari's staff before last season, said he has spoken with his recruits and that none will back out of their commitments.
"The bottom line is there's so much to look forward to with the current team and the future of this team," Pastner told ESPN.com following the NCAA's announcement. "There are no loss of scholarships, no effect on the future of our program. We are on the same level playing field as every other team in the country."
Despite his optimism, Pastner, who had no head-coaching experience when he succeeded Calipari, acknowledged that vacating its Final Four run would have an effect on the program.
"There are no bullets dodged here," he said. "It still hurts. I wasn't here, but it affects a lot of student-athletes, coaches, university officials and fans. There's still a ruling that came down against us, and even though it's in the past and I wasn't here, it still involves the university and I'm part of [this] university."
Memphis originally received the notice of allegations on Jan. 16 and appeared before the committee in June. The primary academic allegation against Rose is that someone stood in for him and took the SAT that Rose was supposed to take, even though the NCAA Eligibility Center later cleared Rose to play.
In its report, the NCAA did not identify the ineligible player as Rose. He was taken by the Chicago Bulls as the No. 1 pick in the 2008 draft and went on to win the NBA Rookie of the Year award.
However, the SAT officials later conducted their own investigation and notified the player, the university and the NCAA's eligibility center in May 2008 that they were voiding his test.
The agency said it sent letters to the player in March and April 2008; the second letter was sent three days after Rose and the Tigers lost to the Jayhawks. Rose did not respond to either letter.
The infractions committee said it struck hard with its penalties because the ineligible player was used the entire season.
One puzzling mention in the committee's report: Chicago native Rose took the fraudulent test in Detroit.
Where Rose took the test and when he received a passing score -- a month before he enrolled at Memphis after failing to qualify three times -- were never specifically addressed by the committee, Dee said.
"The information was available that the exam was taken outside of Chicago," Dee said. "However, when we made the determination that the testing service had canceled the test score, it obviated the need to ask the question as to where the test was taken."
Rose and his agent did not immediately respond to requests for comment from The Associated Press. Two weeks ago, he told reporters he had talked with Calipari about the situation. "I know I didn't do anything wrong," he said.
Kentucky Gov. Steve Beshear said before the NCAA announcement that he was not concerned about the troubles at Memphis following Calipari to Lexington.
"I'm not worried about it because they have never said Coach Cal did anything wrong at all," Beshear said. "I think he's a very upstanding guy. I think that's his reputation and I think that reputation will be with him here. I really don't foresee any problems."
Kentucky athletic director Mitch Barnhart, who hired Calipari away from Memphis earlier this year, declined to comment.
Barnhart told the AP last week he wasn't concerned about the potential violations, which became known only after Kentucky hired Calipari. The coach has not been deemed "at risk" by the NCAA, and Barnhart stressed Calipari is eager to help the Wildcats win the right way.
"There's one thing John says: 'I want my banners to count for something and I want to put the rings on the fingers and let them stay there,'" Barnhart said. "That's important to him, and so he is embracing any help that we give him to make sure we're able to, at the end of the day, not have to look over our shoulders and worry."
Regarding the committee's allegations of travel issues involving Rose's brother, Raines said, "We agree with the facts, but not the penalty. We made an honest mistake. We carefully reviewed our travel processes and have made changes in our policy and procedures, including an internal audit review."
The school's women's golf team has also received three years of probation and lost a scholarship for violations in its program.
Dana O'Neil covers college basketball for ESPN.com. Information from The Associated Press was used in this report.