I think it would be a good idea to have Paladin (the cheat detection system) generate some sort of message to any GMs who are in game at the time telling them of logged actions. At the moment Paladin produces logs, but no one monitors these. If someone is logged cheating by paladin then a message is sent to all GMs who are online at the time (maybe only once every 5 minutes or some time frame, since if they're constantly cheating it will produce alot of messages), who would then be able to observe that persons behavior and ban them if necessary.
This would also give some testing to Paladin and help iron out any bugs, if for example there was a problem with people being flagged when they are not cheating, It would show up pretty quickly.
A way for GM's to opt-out of this would ne necessary in case the system got bugged and generated stacks of messages, or if the GM was busy with something else (like a RP event) at that time.
Lastly some sort of communication between GMs about this sort of thing.. if there are 10 gms online then you dont want every single one teleporting to observe someone running faster than usual. Maybe further down the track once the basics are sorted some system whereby GM's could view a list of recent logged actions, and assign themselves to one of them, thereby taking it off the list.
I understand the aim would be for Paladin to do all this automatically, but the system would want to be pretty damn perfect for it to be automatically banning people, so at some stage there would need to be people overseeing it and testing it, and I think this method could work for that.