Federal Prosecutors Open Criminal Inquiry Into Clippers-Kawhi Leonard Dealings

The Los Angeles Clippers' salary-cap scandal has moved from the NBA's league office to federal court. The Justice Department has opened a criminal investigation into allegations that the Clippers helped arrange sponsorship contracts for star forward Kawhi Leonard that circumvented the league's salary cap, according to multiple people familiar with the matter cited in reporting this week.

The probe is being handled by the US Attorney's Office for the Eastern District of New York in Brooklyn, an office with a long history of investigating professional sports leagues. Prosecutors have issued at least one subpoena, though the investigation remains in its earliest stages and it is unclear whether it will produce federal charges, according to Yahoo Sports. Neither the Justice Department nor the Clippers has commented publicly on the criminal inquiry.

The federal interest follows the NBA's own findings, announced by the league on September 2 after a year-long investigation conducted by outside law firm Wachtell, Lipton, Rosen & Katz. According to the NBA's official summary of the findings, the Clippers organization affirmatively facilitated off-court endorsement deals between Leonard and four companies doing business with the team — Aspiration Partners, Boingo Wireless, Daktronics and Lockton Insurance — at the urging of Leonard's business manager, Dennis Robertson, who the league said began pressuring the team within months of Leonard signing in 2019 to secure roughly $10 million a year in additional income for the star.

The league's penalties were among the harshest in its history: the Clippers forfeited five consecutive first-round draft picks, covering the 2029 through 2033 drafts; the team was fined $30 million; owner Steve Ballmer was suspended for one year from involvement with the team and league business; President of Business Operations Gillian Zucker was suspended a year and President of Basketball Operations Lawrence Frank six months; Leonard himself was fined $700,000; and Robertson was banned from conducting business with any NBA team for five years. The Clippers said in response that they "vehemently reject the NBA's findings, which are the result of a heavily biased investigation," according to the public record of the case.

Separately, the Securities and Exchange Commission is examining the role of Daktronics, the publicly traded scoreboard and display manufacturer whose endorsement deal with Leonard drew scrutiny because the company had never before signed a celebrity endorser and investigators found no evidence Leonard performed promotional work for it.

NBA Commissioner Adam Silver, who oversaw the league's investigation, has previously defended its pace and rigor. "My powers are very broad," Silver said during the probe, citing a "full range of financial penalties, draft picks, suspensions, et cetera" available to him, according to Sports Illustrated's coverage of his remarks. Silver also said he wanted Ballmer and Leonard "to be treated the same way I would want to be treated if people were making allegations against me," attributing the investigation's length in part to complications involving bankruptcy courts and reluctant witnesses.

The criminal inquiry adds a new dimension of exposure for a franchise that has already absorbed the league's stiffest cap-circumvention penalty on record. It is also a reminder that league discipline and federal law are separate tracks: the NBA's findings resolved the basketball-operations consequences, but a criminal referral — should one follow — would raise the possibility of individual liability for executives or associates involved in structuring the disputed deals, a question now squarely in the hands of federal prosecutors rather than Silver's office.