I've not, but it sounds just like the sort of thing WoW would do if someone got their account hacked by gold sellers, so I'm guessing its just a trip to the backup tapes.
They also are mentioning about stripping some characters of ALL their gear, boy that must hurt if the character in question has T4/Avatar gear. I'd be interested in knowing why this happens, I wonder if its due to the exploiter using the duplicated materials to then adorn their gear?
I bet there are some people who will log in with this sort of face :D