The Los Angeles Clippers are facing a federal investigation into allegations that the franchise evaded the NBA’s salary cap to compensate star forward Kawhi Leonard.
The criminal investigation is being led by the United States Attorney’s Office for the Eastern District of New York in Brooklyn and is reportedly in its early stages.
The federal investigation follows a nearly year-long investigation of the NBA by the law firm Wachtell, Lipton, Rosen & Katz.
The league found a “pattern of misconduct and multiple significant rule violations” by the Clippers, who had previously been punished for circumventing the salary cap.
The NBA subsequently fined the franchise $30 million, stripped five future first-round picks and suspended owner Steve Ballmer for one year.
Leonard was also fined $700,000 as part of the league’s punishment.
Alleged endorsement deals examined
The NBA’s investigation found that the Clippers helped arrange off-court income opportunities for Leonard through companies that did business with the team.
Among the deals scrutinized was an endorsement deal involving scoreboard maker Daktronics, with the league alleging that money from a major scoreboard contract for the Intuit Dome was redirected to Leonard.
The NBA also investigated deals with Aspiration Partners, Boingo Wireless and Lockton Insurance.
The federal investigation would represent a second government investigation into financial dealings involving Leonard.
