Federal prosecutors have opened a criminal investigation into the Los Angeles Clippers over allegations the team circumvented the NBA’s salary cap to compensate Kawhi Leonard, The New York Times reported Thursday, citing people briefed on the matter.
The investigation is being led by the U.S. Attorney’s Office for the Eastern District of New York in Brooklyn and is in its earliest stages, The Times reported. At least one subpoena has been issued. Spokespeople for the U.S. Attorney’s Office, the Clippers and the NBA did not respond to requests for comment.
The federal inquiry represents a second government front looking into the Clippers organization’s financial dealings with Leonard. On Sept. 2, the same day the NBA announced its punishments in the matter, an executive for scoreboard company Daktronics said on a quarterly earnings call that the company had been contacted by the U.S. Securities and Exchange Commission about its dealings with Leonard. The executive said the company was cooperating and would not comment further.
The NBA punishment
The NBA concluded a nearly yearlong investigation by the law firm Wachtell, Lipton, Rosen and Katz, which found a pattern of misconduct and multiple significant rules violations by the Clippers organization, which had previously violated cap circumvention rules as a Clippers organization. The probe resulted in the loss of five future first-round picks, a $30 million fine and a yearlong suspension of owner Steve Ballmer. Leonard was also required to pay $700,000.
Clippers investigators found the team directed a kickback from a massive scoreboard contract for Intuit Dome to Leonard in the form of an endorsement deal and set the terms of a multiyear agreement worth millions of dollars.
The federal investigation
What the U.S. Attorney’s Office is examining has not been publicly specified beyond the salary cap circumvention allegation. An investigation of this kind would potentially involve wire fraud or other federal statutes applicable to financial arrangements that conceal compensation. The NBA‘s investigation was civil in nature. A federal prosecution would operate under a different standard and with different potential consequences.
The Eastern District’s league history
The Eastern District of New York has a long history of investigating league-related matters. In 2007, in collaboration with the FBI, it prosecuted former referee Tim Donaghy, who admitted betting on games he officiated and pleaded guilty to conspiracy to commit wire fraud and conspiracy to transmit gambling information.
In 2025, the office indicted then-Portland Trail Blazers coach Chauncey Billups, then-Miami Heat guard Terry Rozier and former player Damon Jones in investigations related to illegal sports betting and rigged poker games with alleged Mafia connections. Earlier this year, the office indicted former players Malik Beasley and Ed Davis in an alleged sports betting scheme.
The opening of an investigation does not mean charges will follow. The office has pursued or declined league-related matters on separate tracks before.
