One of my personal sites got nailed (dropped by 600 positions) for link cloaking to affiliates. It took me a lot of grovelling to Google and 6 months of waiting for it to re-establish its original rankings.
Thought I'd lost it for some time and was almost to the point of scrubbing it and starting again with a new domain name and hosting. But eventually it's back.
Would never cloak any links ever again. Lesson learned.