An international jury has begun hearings into what could be one of the biggest scandals in the 162-year history of the America's Cup.

The panel is investigating an admission by defending champion Oracle Team USA that it illegally modified two of three prototype boats it sailed in four warmup regattas last year and earlier this year.

The jury held a hearing Monday for individuals being investigated under Rule 69 of the Racing Rules of Sailing, which deals with gross misconduct. The jury has scheduled a hearing for Thursday dealing with Protocol Article 60, which is aimed at protecting the reputation of the America's Cup.

The jury could impose unprecedented punishment, including Team USA having to forfeit races in the best-of-17 America's Cup match against Team New Zealand starting Sept. 7.