NEW YORK — Federal prosecutors in Brooklyn have opened a criminal investigation into allegations that the Los Angeles Clippers helped arrange secret sponsorship contracts for Kawhi Leonard that circumvented the NBA salary cap, The New York Times reported Thursday.
The investigation is in its earliest stages and is being handled by the U.S. attorney’s office for the Eastern District of New York, Times reporters Michael S. Schmidt, William K. Rashbaum, and Santul Nerkar wrote, citing two people briefed on the matter. Prosecutors have issued at least one subpoena, according to the same two people. The scope of the inquiry, its targets, and the possible crimes under examination were not clear.
Authorities started looking at the matter before Sept. 2, when the NBA announced it was stripping the Clippers of five first-round draft picks, fining the team $30 million, and suspending owner Steve Ballmer for one year. John Marzulli, a spokesman for the U.S. attorney’s office, declined to comment to the Times. Spokesmen for the Clippers and the NBA did not respond to the newspaper’s questions about whether they are cooperating with the investigation or have received a subpoena.
Criminal charges are not certain, and neither is a grand jury presentation, the people briefed on the matter told the Times. They spoke on the condition of anonymity because the investigation is ongoing.
Among the matters likely under scrutiny, according to the Times, are the endorsement deals Leonard signed and whether Ballmer and other executives helped set them up as a way to pay him beyond what the salary cap allowed. The Clippers and Ballmer are also considering a lawsuit against the league that would ask a judge for a restraining order, the two people said.
NBA Findings On Kawhi Leonard’s Endorsement Deals
On Sept. 3, 2025, Pablo Torre reported on his podcast, “Pablo Torre Finds Out,” that Leonard had a four-year, $28 million endorsement deal with Aspiration, a sustainability company Ballmer had backed with $50 million. Aspiration has since gone bankrupt. The NBA hired the law firm Wachtell, Lipton, Rosen & Katz to run an independent investigation. In May, Torre’s show won the Pulitzer Prize in audio reporting for its work on the Clippers and Leonard.
Leonard signed a three-year contract worth more than $100 million with the Clippers in July 2019. According to the Wachtell report, Leonard’s uncle, Dennis Robertson, pressured the team into providing endorsement deals worth tens of millions of dollars more. The Times reported that the endorsements were never announced publicly and that Leonard did no public endorsement work for the companies.
The findings the league released Sept. 2 said the Clippers initiated off-court income opportunities between Leonard and four companies doing business with the team: Aspiration Partners, Boingo Wireless, Daktronics, and Lockton Insurance. Investigators also found that the Clippers paid personal expenses on behalf of Leonard and his representatives.
Along with the forfeited picks, one in each draft from 2029 through 2033, the NBA suspended Ballmer from all league and team activities. Clippers president of business operations Gillian Zucker was suspended without pay for one year. President of basketball operations Lawrence Frank was suspended without pay for six months. Leonard was ordered to pay the league $700,000, and Robertson was banned from conducting business with NBA teams and their affiliates for five years. The NBA said Wachtell continues to receive information relevant to the investigation and that the league will consider further action as appropriate.
In a statement released through agent Harrison Gaines, Leonard accepted full responsibility for lapses in judgment by people within his inner circle.
“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,” Leonard said.
Aspiration co-founder Joseph Sanberg pleaded guilty in October 2025 to two counts of wire fraud in federal court in Los Angeles. Earlier this year, he was sentenced to 14 years in federal prison for defrauding investors and lenders of at least $248 million.
Ballmer’s attorney, David Kelley, sent NBA Commissioner Adam Silver a letter Sept. 2 that the Clippers released, The Associated Press reported. Kelley, a partner at O’Melveny & Myers, said Silver had not kept his promises that the investigation would be governed by due process and that the league would carry the burden of proving any violation through evidence.
“League counsel has acknowledged in our discussions that the league does not believe there was an agreement between the Clippers and Aspiration to funnel money to Kawhi Leonard,” Kelley wrote. “League counsel also agreed with the Department of Justice, the Securities and Exchange Commission, and a federal judge that Mr. Ballmer was a victim of Joe Sanberg’s fraud — not a participant.”
The Justice Department is the second arm of the federal government to examine the Clippers’ dealings with Leonard, the Times reported. On Sept. 2, Daktronics acting chief financial officer Howard Atkins said on the company’s fiscal 2027 first-quarter earnings call that the Securities and Exchange Commission is seeking information concerning the company and Leonard. The South Dakota manufacturer designed the Halo Board inside Intuit Dome, the Clippers’ arena. Atkins said the NBA had also requested information from Daktronics.
“We take these requests seriously and are cooperating,” Atkins said. “At this point, out of respect for the respective processes, we will not be providing further comment.”
Leonard remains on the Clippers’ roster. The team agreed June 30 to trade him to the Toronto Raptors, and the deal was put on hold July 9 while the NBA investigation continued. The trade had not been completed as of Thursday. Last season, Leonard averaged 27.9 points, 6.4 rebounds, and 3.6 assists in 65 games.
Brooklyn Prosecutors Charged Chauncey Billups, Emmanuel Clase
In 2007, the U.S. attorney’s office in Brooklyn and the FBI brought a case against NBA referee Tim Donaghy, who admitted to betting on games he officiated. Over the past two years, prosecutors in the Eastern District of New York have charged eight current and former professional athletes in cases involving illegal gambling, the Times reported.
The defendants include Hall of Fame guard Chauncey Billups and Cleveland Guardians pitcher Emmanuel Clase. Both have pleaded not guilty. Clase made his major league debut with the Texas Rangers in 2019.
In 2015, federal prosecutors in Brooklyn charged dozens of defendants in a corruption case aimed at FIFA, the governing body of global soccer. Prosecutors in that case said sports marketing executives paid soccer officials $150 million in bribes to secure broadcast rights to tournaments.
