Is this just a slap on the wrist, or bigger fine/punishment? 

So far you've risked nothing but you have an opportunity you can leverage into meaningful experience that will help you next time if this one doesn't add up.I've seen situations like this where the house represented such bad blood, the seller wanted to lose money to punish his ex.Good luck!

why waste your time trying to punish him, just see what you get as a result of your discovery

I don't want to be a glutton for punishment like this guy from Fight Club.

Let’s punish consumers for what the big banks and Wall Street did to them!

Just like all examiners are not overzealous or out to punish..

I'm not telling you what to do here and the law says you must live there a year to bid owner occupant, but I'm having trouble finding anyone anywhere that has been caught buying illegally and has gotten punished?

Joe GoreDo you think it's fair that you get punished for paying an old debt?

That is correct however, there is jail and punishments for these other actions which go hand in hand with these types of schemes.

So sometimes for me it is a fine line between the punisher of losing profit on the one hand, and essentially acting immorally on the other (which causes me shame, which is a punisher).