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I do not see any violation of Google or Bing guidelines with that URL setup. I would not necessarily recommend doing it, but if your client did it would not be a violation as stated. Based on your question, it seems the site is penalized. There is a lot more details required to diagnose the penalty. Some initial ideas can be generated from a few basic questions: on what date was the site penalized? how was the site penalized? Was the entire site removed from the index? Or certain pages / keywords? was there any notice received in WMT? are there any known violations of the guidelines? poor content? manipulative links? other issues?