Photo credit: Facebook/Kawhi Leonard
A salary cap dispute that the NBA seemed to close last week has grown into something much bigger. Federal prosecutors have opened a criminal investigation into the Los Angeles Clippers over the team’s financial dealings with star forward Kawhi Leonard, according to a report from The New York Times. That shift matters because it is rare. League rules disputes almost never turn into federal criminal inquiries, and this one now sits with the US Attorney’s Office for the Eastern District of New York in Brooklyn.
The investigation remains in its early stages. It is not yet clear whether it will lead to charges or reach a grand jury. Prosecutors have reportedly issued at least one subpoena, and the inquiry apparently began before the NBA even announced the results of its own yearlong review. Representatives for the Clippers, the NBA and the US attorney’s office have not commented publicly on the federal matter.
What the NBA already found
The league’s penalties, announced September 2, were significant. Investigators fined the Clippers 30 million dollars and ordered the team to forfeit a first round draft pick every year from 2029 through 2033. Owner Steve Ballmer received a one year suspension, and Leonard, 35, was ordered to pay 700,000 dollars.
According to the league’s findings, the franchise showed a pattern of misconduct and was described as a repeat offender on circumvention rules. Investigators pointed to an arrangement in which the team allegedly steered Leonard toward sponsors for off court income. That arrangement reportedly included a kickback from an arena scoreboard contract funneled into an endorsement deal.
The money trail drawing federal interest
The businesses named in the case include Boingo Wireless, Daktronics, Lockton Insurance and Aspiration Partners, a financial technology firm that went bankrupt last year. Aspiration allegedly signed Leonard to a 28 million dollar endorsement deal while holding a separate long term sponsorship agreement with the Clippers worth hundreds of millions. One scoreboard company has already confirmed it was contacted by the Securities and Exchange Commission about its dealings with Leonard, and the company says it is cooperating. That web of unrecorded third party contracts appears to be the thread federal prosecutors are now pulling.
Why the Clippers are pushing back
The team has firmly disputed the league’s conclusions and denied any wrongdoing. Ballmer and the Clippers are reportedly considering a lawsuit against the NBA, including a request for a restraining order to pause the penalties. Leonard has said he had no knowledge of any plan to skirt the salary cap. He has pointed instead to lapses by people in his circle, including his uncle and former business manager, Dennis Robertson, who was banned from the league for five years.
A trade now caught in the middle
The part of this story most likely to affect the court product is a trade already on hold. Leonard agreed in principle in late June to a deal sending him back to the Toronto Raptors, the team he won a title with in 2019. That package would send Brandon Ingram and Gradey Dick to Los Angeles in return. Both sides paused the trade while the league finished its review. With a federal investigation now added to the situation, the timing of that potential reunion looks increasingly uncertain, and what started as a fine now looks like a story with several chapters still ahead.
About the Author
