Scott forged a passport and supplied other "false and misleading information" as he desperately tried to cover up the fact he had not secured the right visa for New Zealand-born scrum-half Tyson Keats.
London Welsh were last night deducted five Aviva Premiership points and fined £15,000 for fielding an ineligible player in 10 matches, including all four of their league victories.
The club, now bottom of the league by two points from Sale Sharks, have vowed to appeal the verdict, arguing they were "unknowingly the victim of one individual's fraudulent conduct".
The RFU's disciplinary chief Judge Jeff Blackett banned Scott from the management, coaching or playing of rugby union and membership of any club for life.
In a written submission, Scott apologised for his actions and said there was no pre-conceived plan.
Scott did apply for Keats' ancestry visa but it was rejected because he had failed to include all the necessary documentation.
At that stage, Scott said he made a "gross error of judgement" in submitting false registration forms to the RFU, claiming Keats was born in Christchurch, England rather than Christchurch, New Zealand.
Scott then compounded that error with a number of further actions, including the submission of a forged passport to the RFU. Scott accepted a police caution on February 14.
In his verdict, Blackett said: "This is a very sad case in which a respected administrator has acted completely out of character thereby bringing discredit to himself and to the club that he represented.
"I accept that Mr Scott would have been under greater pressure than normal for a team manager because the decision for London Welsh to be promoted to the Aviva Premiership was delayed after which the club had less time than normal to prepare for the coming season.
"Nevertheless, that does not excuse his actions which individually and collectively amount to gross misconduct, and amount to criminal behaviour in relation to providing false information and forging documents.
"The actions undermine the very integrity of the game and, particularly, the competition in the Aviva Premiership.
"There is no place in the game for this type of behaviour or the type of person who would act in such a dishonest manner throughout an extended course of conduct designed to mislead both the Rugby Football Union and his own club.
"In those circumstances the appropriate sanction is that Mr Scott should be suspended from any involvement in the management, coaching or playing of rugby football union in any capacity for the rest of his life.
"Further he should not be a member of any club affiliated to the RFU for the same period."
Scott can apply for the order to be lifted in 10 years.
However, in his written submission Scott said he would never take up another position in the sport because he "does not wish to further stain the good name of rugby union".