Federal prosecutors in Brooklyn have initiated a criminal investigation into allegations that the Los Angeles Clippers circumvented NBA salary-cap rules through off-the-books payments to All-Star Kawhi Leonard, involving third-party side deals.
This new probe comes days after the NBA concluded its own investigation, resulting in the Clippers being stripped of five future first-round draft picks, a $30 million fine for owner Steve Ballmer, and a one-year suspension for the former Microsoft CEO. The NBA's investigation found a pattern of misconduct and multiple significant rules violations by the Clippers, who had previously faced scrutiny for similar salary cap circumvention.
The league's probe focused on accusations that the Clippers funneled money to Leonard through an endorsement deal with companies, including Aspiration, a green banking firm that has since gone bankrupt. Joseph Sandberg, a co-founder of Aspiration, admitted to defrauding investors out of $248 million.
While not suspended, Leonard was ordered to pay $700,000 in restitution for improper benefits he and his representative, Dennis Robertson, received from the Clippers and other organizations. However, the NBA stated that Leonard's contracts would not be voided. Robertson has been banned from any business dealings with the NBA. Clippers president of basketball operations Lawrence Frank received a six-month unpaid suspension, and president of business operations Gillian Zucker a one-year ban.
The Clippers organization has vehemently rejected the NBA's findings, calling the investigation heavily biased and asserting that the league's public statements differed from private communications. The team plans to challenge the penalties through arbitration.
A report by law firm Wachtell Lipton detailed that the Clippers violated NBA rules by initiating off-court income opportunities between Leonard and four companies doing business with the team: Aspiration Partners, Boingo Wireless, Daktronics, and Lockton Insurance. The team is also accused of facilitating endorsement deals by offering other business to these companies and paying personal expenses for Leonard and his representatives. Furthermore, the Clippers failed to report improper solicitations made on Leonard's behalf by Robertson.
This is not the first time the Clippers have faced such accusations. In 2015, the team was fined $250,000 for similar violations related to a player sponsor endorsement agreement. The Wachtell Lipton report noted that the team should have been aware of the rules.
Leonard and Robertson were found to have pressured the Clippers to assist in obtaining off-court income opportunities, which they did, and subsequently failed to reimburse the team for personal expenses. Leonard stated in a released statement that he accepts responsibility for lapses in judgment by individuals in his inner circle and regrets the distraction. He also stated he entered into his contract in good faith with no knowledge of any intent to circumvent the salary cap.
There is precedent for the NBA's disciplinary actions. In 2000, the Minnesota Timberwolves were stripped of five first-round picks and fined $3.5 million for circumventing the salary cap to improperly pay Joe Smith. Some of those picks were later returned to the Timberwolves due to their cooperation with the league.
NBA Commissioner Adam Silver stated that the collectively bargained system for player compensation is fundamental to the league and expressed disappointment in the "flagrant violations of our rules and by the Clippers' institutional and leadership failures." He emphasized that the severity of the penalties reflects the seriousness of the violations.
The allegations against the Clippers first surfaced nearly a year ago, reportedly on Pablo Torre's podcast, stemming from a 2025 bankruptcy filing involving Aspiration. The filing listed the Clippers and a company owned by Leonard as creditors for an Aspiration subsidiary. Reports suggested Leonard had a $28 million "no-show" endorsement deal with Aspiration, a company in which Ballmer had personally invested $50 million. Leonard did not publicly endorse Aspiration. Ballmer had previously stated he was "embarrassed" he did not detect Aspiration's financial troubles but defended the Clippers' actions.
Payments from Aspiration were allegedly sent to Robertson, who had been previously investigated by the NBA in 2019 for requesting impermissible benefits, though that investigation did not find any improper benefits from the Clippers at the time. A year later, a lawsuit was filed by an acquaintance of Robertson claiming he was owed $2.5 million for helping the Clippers sign Leonard, alleging that Ballmer would fund a marketing campaign for Leonard and Robertson would receive a home if the player signed with the team. That lawsuit was dismissed, with neither the Clippers nor Robertson admitting wrongdoing.
Before the NBA's penalties, the Clippers had already been subject to a significant trade that was put on hold during the league investigation: a deal to send Leonard back to Toronto, where he won an NBA title in 2019 before signing with Los Angeles. The team officially paid Leonard $291 million over seven seasons, in addition to the millions allegedly funneled through other businesses and the recent $30 million fine.
The Clippers, who reached the Western Conference Semis and Finals in 2020 and 2021 respectively, have not won a playoff series since the Leonard era began. Despite the investment and team moves, including the acquisition of Paul George from Oklahoma City in exchange for Shai Gilgeous-Alexander, the team's postseason success has been limited during Leonard's tenure.