Federal prosecutors in Brooklyn have launched a criminal investigation into allegations that the Los Angeles Clippers made under-the-table payments to All-Star forward Kawhi Leonard.
The early-stage investigation, first reported by The New York Times, centers on claims that the team circumvented National Basketball Association salary-cap rules using third-party side deals. Representatives for the Clippers and the US attorney's office in Brooklyn did not immediately respond to requests for comment.
The federal probe comes shortly after the NBA issued sweeping sanctions against the franchise. The league stripped the Clippers of five first-round draft picks, issued a $30 million fine to billionaire owner Steve Ballmer, and suspended the former Microsoft chief executive officer for one year following its own investigation.
Although the 35-year-old Leonard was not suspended, the NBA ordered him to pay $700,000 in restitution for improper benefits received by him and his uncle and representative, Dennis Robertson. Leonard will not have any contracts voided by the league, but Robertson has been banned from conducting any business dealings with the NBA.
In addition to Ballmer's suspension, Clippers president of basketball operations Lawrence Frank received a six-month suspension without pay, while president of business operations Gillian Zucker was handed a one-year ban. Both the NBA and the National Basketball Players Association confirmed that all punishments are binding.
Legal challenges and league findings
Ballmer and the Clippers are considering legal action against the penalties, with two sources telling The New York Times that the team is weighing a lawsuit or requesting a judicial restraining order.
In a statement, the Clippers strongly disputed the NBA's conclusions. "We vehemently reject the NBA's findings, which are the result of a heavily biased investigation seeking to justify a predetermined narrative rather than facts and evidence," the team said.
The franchise added: "What the league told us privately differs from what it announced today publicly, and they have not held themselves close to the standard Commissioner Silver set at the start of this investigation to ensure it's fairness and accuracy. For the past year, we cooperated fully and in good faith and we will now fight just as hard to demonstrate our innocence. We intend to vigorously challenge these findings and penalties through every avenue available to us and look forward to an ethical and impartial arbitration process."
According to a summary report by law firm Wachtell Lipton, the league found a pattern of misconduct by the Clippers, identifying them as a prior offender of salary-cap rules. The report stated that the team violated league rules by "initiating off-court income opportunities between Mr. Leonard and four companies doing business with the team."
The four companies named in the report are Aspiration Partners, Boingo Wireless, Daktronics, and Lockton Insurance. League investigators accused the Clippers of facilitating endorsement deals, offering team business to induce companies into entering those agreements, and paying personal expenses on behalf of Leonard and his representatives while failing to report improper solicitations made by Robertson.
Wachtell Lipton noted that the Clippers should have known the rules because of a previous violation in 2015. "In 2015, in circumstances similar to the matter at hand, the Clippers engaged in efforts to facilitate an endorsement agreement between DeAndre Jordan, a player the Clippers were then seeking to sign in free agency, and an incoming team sponsor," the report stated. "The League investigated this matter, determined that the rules had been broken, and fined the Clippers $250,000."
Trade to Toronto and player response
Investigators concluded that Leonard and Robertson pressured "the Clippers to assist [Leonard] in obtaining off-court income opportunities, successfully obtaining those opportunities, and failing to reimburse payments by the Clippers for personal expenses."
Amid the fallout, the Clippers recently agreed to trade Leonard back to the Toronto Raptors, the team he led to an NBA championship in 2019 before signing with Los Angeles. The trade was delayed during the summer while the league completed its investigation, but Leonard confirmed his departure in a statement released by his agent.
"Integrity and respect for this game are fundamental to who I am," Leonard said. "I accept full responsibility for lapses in judgment by people within my inner circle and regret the distraction this situation has caused the fans and my family."
Leonard added: "I entered into my contract with the Clippers as well as the agreements in question in good faith, fully committed to fulfilling my obligations and with no knowledge of any intent on anyone's part to circumvent the salary cap. For 15 years, my priority has been giving everything to my family, the game, and those I share the court with. As I return to Toronto, I am focused on what I can control, closing this chapter, and moving forward with a clean slate."
NBA precedent and franchise history
The NBA's severe penalties align with precedent established in 2000 by former commissioner David Stern. At that time, Stern stripped the Minnesota Timberwolves of five first-round draft picks after finding the team had illegally circumvented the salary cap to pay forward Joe Smith. The Timberwolves were fined $3.5 million, though some draft picks were eventually restored after Minnesota cooperated with the league.
NBA Commissioner Adam Silver defended the severity of the sanctions in an official statement. "The NBA's collectively bargained system for determining player compensation is a fundamental component of the basketball competition that the league oversees for the benefit of the teams and players and ultimately the fans," Silver said. "I am deeply disappointed by the flagrant violations of our rules and by the Clippers' institutional and leadership failures that led to this misconduct. The severity of the penalties reflects the seriousness of the violations."
Leonard's arrival in 2019 was intended to transform a franchise historically known as an NBA cellar-dweller. To pair another star with Leonard, the Clippers traded budding guard Shai Gilgeous-Alexander and draft assets to the Oklahoma City Thunder for veteran All-Star Paul George. Gilgeous-Alexander later won an NBA championship and league Most Valuable Player honors with Oklahoma City.
Over seven seasons, the Clippers officially paid Leonard $291 million in player salary, in addition to the funds allegedly routed through external businesses and the $30 million league fine. Leonard had originally signed a three-year, $103 million deal with the team in 2019. Despite the investment, the Clippers reached the Western Conference Semifinals in 2020 and the Western Conference Finals in 2021, but have failed to win a playoff series since.
Fintech deal and prior allegations
Allegations surrounding side payments first emerged nearly one year ago on a podcast hosted by Pablo Torre. The podcast alleged that the Clippers facilitated an under-the-table agreement for Leonard that allowed the team to remain under salary limits while adding stars such as George. The Clippers repeatedly denied the claims, and Ballmer denied knowing about an alleged $28 million endorsement contract for Leonard with green banking firm Aspiration.
Aspiration has since collapsed into bankruptcy, and co-founder Joseph Sandberg admitted to defrauding investors out of $248 million. Torre cited a 2025 federal bankruptcy filing in Delaware, which named the Clippers and Leonard's company, KL2 Aspire LLC, as creditors of Aspiration QFZ, LLC, a subsidiary of Aspiration Partners Inc. Documents showed unsecured claims of $30 million for the Clippers and $7 million for KL2 Aspire LLC.
Torre reported contracts showing Aspiration QFZ, LLC signed a $28 million endorsement deal with KL2 Aspire LLC in April 2022, which was described as a "no-show" job because Leonard never publicly promoted the company. Following a report by the Boston Sports Journal, Torre also claimed Leonard received a separate $20 million side deal from Aspiration.
Ballmer had invested $50 million in Aspiration through an LLC in 2021, while the Clippers entered a $300 million sponsorship deal with the firm. Ballmer stated last year that he was embarrassed by the company's financial failure but maintained that neither he nor the Clippers were involved in Aspiration's agreement with Leonard. The Clippers noted in a statement that they ended their business relationship with Aspiration during the 2022-23 season when the company defaulted on its payments.
Payments from Aspiration to KL2 Aspire were reportedly directed to Robertson, who had previously been investigated by the NBA in 2019 over claims of requesting improper benefits. That initial investigation cleared both the Clippers and Robertson of wrongdoing.
In 2020, Johnny Wilkes, a self-described acquaintance of Leonard and Robertson, filed a lawsuit claiming the Clippers owed him $2.5 million for helping sign the former San Antonio Spurs and Raptors star. Wilkes alleged Ballmer promised to fund a $100 million marketing campaign for Leonard and provide a home in Southern California for Robertson. The lawsuit was dismissed without any admission of liability by the team or Robertson.
