Cheaters and liars. What to do...

I was dawdling around over at Buzzflash when I came across an article about some people cheating and the teacher exposing them getting fired. Here is the story link.

Anyway, you can see my post there about this and you see I getting pretty long winded about it (personally hit a nerve) and I want to know what people think about this in a more in-depth manner.

Just in case you're not into site-hopping here's my actual post from the comments section
"doing my 1st year of postgrad way-back-when I was appalled at the presence of a student I KNEW to be a rich, lay, stupid and arrogant bastard. He had paid for every essay, every lab and I sincerely doubt he was beyond a middle- high school mentality. This person was never punished, censured or even spoken to harshly for his performance and yet, 2 years later he got the same damn degree as I have and I know with absolute certainty he is in NO way qualified to hold it. If he had been caught exposure would have done him no harm at all. When your mommy and daddums hold one of the biggest scholarship bursaries purse strings the faculty are made to look the other way. If a person of more modest means had done anything even remotely close they would have been expelled and evicted from the campus within the week.

Money can buy, control and mandate as it wishes. It inspires fear and envy and it will always get people whatever they want as long as they have enough of it. Sadly, this sounds like a rant for fully socialized post secondary education which I think is a good idea, but, I wouldn't want to send my kids to a budget controlled 3rd rate school because they were ALL that way either.

Cheating and lying need to be addressed in a relatively severe manner beside expulsion. Allow continued study after ensuring the student is demoted in standing, restricted on campus activities and must footnote the hell out of everything he submits from then on. Put up a "Cheaters Hall of Fame" in the school and see what happens. You'd either be sued into the stone age or end up running a seminary.

Sorry, long winded.".

It's one of those things that make me wonder what the consencus would be in these cases. Is it a moral imperative to expose the dishonest? Do we owe young academics the second chance after making a serious blunder by trying to pass of someone else's work as their own?

I've got 4 kids and I'm torn.