Federal prosecutors launch criminal probe into Clippers' salary-cap violations involving Kawhi Leonard

Federal prosecutors in Brooklyn have opened a criminal investigation into the Los Angeles Clippers, alleging the team bypassed NBA salary-cap rules to compensate forward Kawhi Leonard, according to sources briefed by The New York Times. The probe, described as being in its earliest stages, follows a nearly year-long NBA investigation conducted by the law firm Wachtell, Lipton, Rosen & Katz, which concluded the franchise engaged in a pattern of misconduct and multiple significant rules violations.

The league responded with a severe penalty that includes the forfeiture of five future first-round draft picks, a $30 million fine and a one-year suspension of owner Steve Ballmer. Leonard is also required to pay $700,000 to the NBA as part of his punishment.

"The investigation is being led by the U.S. Attorney's Office in Brooklyn and is at a very early stage," a spokesperson for the office said in a statement to reporters.

At least one subpoena has been issued as part of the federal inquiry. The investigation marks the second government-level review of the Clippers' financial arrangements with Leonard, after the Securities and Exchange Commission contacted scoreboard manufacturer Daktronics about its dealings with the player. Daktronics officials said the company is cooperating with the SEC and declined further comment.

League investigators previously reported that the Clippers directed a kickback from a large scoreboard contract for the Intuit Dome to Leonard through an endorsement agreement and set the terms of a multiyear, multi-million-dollar deal.