Federal prosecutors have reportedly opened a criminal investigation into the Los Angeles Clippers over allegations that the NBA franchise arranged secret financial benefits for Kawhi Leonard to circumvent the league’s salary-cap rules.
The probe, led by the US Attorney’s Office in Brooklyn, follows an NBA investigation that resulted in the Clippers being fined $30 million, losing five first-round draft picks and owner Steve Ballmer receiving a one-year suspension.
At least one subpoena has reportedly been issued, while the investigation could involve a grand jury, according to The New York Times. The existence of the inquiry does not mean that the Clippers, Ballmer or Leonard have been charged with or found guilty of a federal crime.
NBA found pattern of salary-cap violations
The NBA imposed its penalties on September 2 after an independent investigation concluded that the Clippers had committed multiple serious violations involving off-court payments to Leonard.
According to the league, the franchise connected Leonard with companies that had business relationships with the Clippers, helped arrange endorsement agreements and offered those companies team business as an inducement.
The NBA also found that the Clippers paid personal expenses for Leonard and his representatives and failed to report improper requests allegedly made by his uncle and former business manager, Dennis Robertson.
Ballmer was suspended from all team and league activities for one year after the NBA found that he knowingly helped Leonard obtain off-court income.
The Clippers must surrender their first-round draft picks in each year from 2029 to 2033. President of business operations Gillian Zucker was suspended for one year, while basketball operations president Lawrence Frank received a six-month suspension.
Leonard was fined $700,000, and Robertson was banned from conducting business with NBA teams for five years.
$28 million Aspiration deal under scrutiny
Central to the controversy was a reported four-year, $28 million endorsement agreement between Leonard’s company and Aspiration Partners, a now-bankrupt financial technology and environmental business in which Ballmer had invested.
The arrangement was described as a “no-show” endorsement deal because Leonard was allegedly not required to perform substantial promotional work to receive the money.
Reports also indicated that the contract was linked to Leonard remaining with the Clippers.
The NBA investigation identified Aspiration, Boingo Wireless, Daktronics and Lockton Insurance as companies through which the Clippers allegedly helped Leonard obtain off-court income.
Aspiration’s collapse and a separate fraud case involving its co-founder have increased scrutiny of the financial arrangements surrounding the company.
The reported federal investigation is expected to examine whether any conduct connected to those transactions violated criminal law. Breaching NBA salary-cap regulations alone is a league matter and does not automatically constitute a federal crime.
Clippers vow to fight NBA punishment
The Clippers have strongly denied wrongdoing and rejected the NBA investigation as biased.
“We vehemently reject the NBA’s findings,” the franchise said after the penalties were announced, accusing the league of pursuing a predetermined conclusion.
The team said it intended to challenge the findings and sanctions through every available avenue. Ballmer and the Clippers are reportedly considering legal action against the NBA.
Leonard has maintained that he entered the agreements in good faith and had no knowledge of any attempt to circumvent the salary cap.
“I accept full responsibility for lapses in judgment by people within my inner circle,” he said, while expressing regret for the distraction caused to his family and supporters.
The two-time NBA champion joined the Clippers in 2019 after leading the Toronto Raptors to their first championship. He won his first title with the San Antonio Spurs in 2014 and was named NBA Finals Most Valuable Player during both championship runs.
Federal prosecutors have not publicly announced charges, and the reported investigation remains at an early stage.
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