A bit more background
http://articles.latimes.com/1993-10-05/business/fi-42487_1_hubble-telescope
I agree that the resolution of that matter was not handled correctly- as pointed out the cost of the fraud far exceeded the punishment (fines). but as you can see in the above article it was an agreement with the Justice department. It doesn't look like NASA really set the punishment, and it certainly was never in the hands of any of the scientists, engineers or technicians...
It looks like it was a political resolution...