Leave.EU has been fined a maximum £70,000 for breaches of electoral law during the EU referendum campaign, with the head of the pro-Brexit group referred to police.
The Electoral Commission announced the findings of its investigation on Friday, with Leave.EU found to have incorrectly reported what it spent at the EU referendum.
It exceeded its statutory spending limit of £700,000 and delivered incomplete and inaccurate spending and transaction returns.
The group, which was not the official Brexit campaign, failed to include at least £77,380 in its spending return.
This means Leave.EU exceeded its spending limit by at least 10%, although the Electoral Commission believes the unlawful overspend may have been considerably higher.
The investigation also found the group, which was initially endorsed by former UKIP leader Nigel Farage and was founded by millionaire businessmen Arron Banks and Richard Tice, inaccurately reported three loans it received from Mr Banks worth £6m.
In addition, Leave.EU failed to provide the required invoice or receipt for 97 payments of more than £200, totalling £80,224, and failed to report payment for services from US campaign strategy firm Goddard Gunster.
During the course of its investigation, the Electoral Commission said it found "reasonable grounds to suspect" Leave.EU's chief executive Liz Bilney committed criminal offences.
She has been referred to the Metropolitan Police.
The Met confirmed the Electoral Commission had referred a potential criminal offence under section 123(4) of the Political Parties, Elections and Referendums Act 2000.
However, the Electoral Commission probe found no evidence Leave.EU received donations or paid-for services from Cambridge Analytica for its referendum campaigning and the group's relationship with the firm did not develop beyond initial scoping work.
Earlier this month, Cambridge Analytica announced it was closing amid the fallout from allegations the personal data of millions of people had been harvested from Facebook and improperly shared with the firm.
Cambridge Analytica denies any wrongdoing.
The fine handed to Leave.EU matches the previous record sanction, slapped on the Conservatives in March last year for offences during the 2015 general election and by-elections in 2014.
The Electoral Commission said the penalties imposed on Leave.EU had been constrained by the cap on the watchdog's fines.
Former UKIP funder Mr Banks, who has self-styled his group as the "Bad Boys of Brexit" in a book on their campaigning, vowed to challenge the decision in court.
He branded the Electoral Commission's announcement "a politically motivated attack on Brexit and the 17.4 million people who defied the establishment to vote for an independent Britain".
Mr Banks added the Electoral Commission had gone "big game fishing and found a few 'aged' dead sardines on the beach", continuing: "So much for the big conspiracy! What a shambles, we will see them in court."
He also contacted Guardian journalist Carole Cadwalladr on Twitter, posting: "No Cambridge Analytica involvement & fined for an alleged £7k over spend (we dispute) on £12m. An apology might be in order carole."
Ms Cadwalladr has written a series of articles about Cambridge Analytica and Leave.EU in recent weeks.
Mr Banks and Andy Wigmore, Leave.EU's communications director, will be questioned by the House of Commons' digital, culture, media and sport committee on 12 June.
Senior officials from the Electoral Commission will discuss their investigation into Leave.EU with the group of MPs on Tuesday.
Bob Posner, the Electoral Commission's director of political finance and regulation, said: "The rules we enforce were put in place by Parliament to ensure transparency and public confidence in our democratic processes.
"It is therefore disappointing that Leave.EU, a key player in the EU referendum, was unable to abide by these rules.
"Leave.EU exceeded its spending limit and failed to declare its funding and its spending correctly. These are serious offences.
"The level of fine we have imposed has been constrained by the cap on the commission's fines."
A separate investigation into Vote Leave, the official Brexit campaign, continues.
