THE Los Angeles Clippers are facing a new legal challenge after federal prosecutors in Brooklyn opened a criminal investigation into allegations that the team helped circumvent the NBA salary cap through endorsement arrangements involving Kawhi Leonard.
According to a report by The New York Times, the inquiry is still in its earliest stages, and prosecutors have already issued at least one subpoena connected to the matter.
The federal investigation comes shortly after the NBA completed its own probe, which found that the Clippers committed multiple salary-cap violations involving Leonard and four companies.
The NBA determined that the organization facilitated endorsement opportunities for Leonard, including deals with Aspiration Partners, Boingo Wireless, Daktronics and Lockton Insurance, while also providing other assistance connected to the arrangements.
The league responded with unprecedented penalties on September 2, including a $30 million fine and the forfeiture of five first-round picks from the 2029 through 2033 drafts. Team owner Steve Ballmer was suspended for one year, while basketball operations president Lawrence Frank received a six-month suspension. Leonard was fined $700,000.
The Clippers have continued to deny wrongdoing and have indicated that they may challenge the NBA’s findings through legal action.
The federal inquiry is separate from the NBA’s disciplinary process and does not mean criminal charges will necessarily follow. Sources familiar with the investigation told The Times that it remains unclear whether the case will eventually reach a grand jury.
The situation has also expanded beyond the Clippers and Leonard. Daktronics, one of the companies involved in the NBA investigation, confirmed that the Securities and Exchange Commission had sought information regarding its endorsement arrangement with Leonard.
The case now puts the Clippers under scrutiny from both the NBA and federal authorities as investigators examine whether the endorsement arrangements were used to provide Leonard compensation outside the league’s salary-cap system. (Jesus Nathaniel Valdez)
