Can a university legally hold a transcript over a dispute with an employer associated with that university?

During my undergraduate studies I worked in a lab on campus. During my employment there was internal issues with payroll resulting in no checks and balances being made for the hours I would submit online. This was realized by another coworker of mine who abused the system and over-reported hours while scarcely showing up to work. Almost a year after working there I was sent an email one day that told me that all undergraduates working in the lab could no longer come to work because of some kind of danger it posed to them. About a week later I found out that they were looking into all the undergraduates who worked in the lab and compared their hours with one another. I was over 200 hours in reported hours less than the other worker who did over-report but they still pegged me as guilty. The said I owed upwards near 300 hours of money (~$2500) in over-reported hours and this number was based on a figure created by one of the lab techs who worked there who was one of my two separate supervisors. I disputed the claim endlessly, going through the university legal system, was involved in a hearing where they turned my evidence against me and without even considering it was a mistake that they had found me guilty they said I could either pay or be suspended. I chose to continue the dispute and transfer to another school before they could put a hold on my records. I continued disputing, was suspended from that school (while the guilty over-reporter paid and got put on probation) and now that I am graduated with my degree from another school wanting to apply to medical school next year I am unable to retrieve my transcript from that university because of this unresolved dispute. Is this legal? I was not sent to collections for any of this money they claim I owe and I am being denied access to my transcripts which is seemingly unrelated to my employment. I owe nothing in terms of money for the courses I took. Should I take it to the courts? How do I get access to these transcripts and explain to schools I apply to my situation?