Nine athletes were detained on Aug. 19 by local authorities for over seven hours after they were discovered to have entered the basketball arena without proper accreditation for Australia's semi-final against Serbia.
They were released without conviction after the AOC agreed to pay court-ordered fines of 10,000 Brazilian reais (2,359.21 pounds) for each athlete.
A report commissioned by the AOC said two of its 'Athletes Services' staff had stuck labels on the accreditations to allow them to enter the venue.
While inside, the athletes were discovered by volunteers, had their accreditations confiscated and were taken to the venue manager's office before the matter was referred to police.
The report, written by prominent sports lawyer Patrick George, said it was not the first time delegation staff had manipulated accreditations to allow athletes to enter venues unauthorised.
They had printed labels to allow them to enter "various venues" during the first week of competition, the report added, a practice that came to the attention of team chef de mission Kitty Chiller who ordered it to cease.
The report nonetheless questioned the Brazilian authorities' detention of the athletes and said the venue manager and police should have consulted with the International Olympic Committee (IOC) about the issue but had failed to do so.
It added the IOC had not made any complaint against the athletes.
"The case for prosecution of these offences was flawed," the report said.
"The oppressive nature of the criminal process and the manner of which the process was pursued in this instance means the AOC and the IOC should now make every effort to redeem the athletes ... and make an attempt to repair their good reputations."
The AOC said it would join with the IOC to seek to have the athletes' records of criminal proceedings expunged immediately, rather than wait for a two-year 'good behaviour' period ordered by the court to elapse.
"(The athletes) have already suffered disproportionately by reason of the criminal process issued against them in Rio," the AOC Disciplinary Committee said in a statement on Thursday.
It said the athletes services staff, who were volunteers and former Olympians, had been admonished and were denied privileges including participating in the closing ceremony.
"The Commission also noted ... that their motive to assist their team mates occurred in the context of a complex situation at the Games including empty seats at venues which had been the subject of criticism by the media and IOC in the lead up to and in the course of the Games themselves."
(Editing by Greg Stutchbury)
