Federal prosecutors open investigation into Clippers' payments to Kawhi Leonard
U.S. Attorney's Office in Brooklyn has launched a criminal probe into the Los Angeles Clippers for alleged salary-cap violations involving Kawhi Leonard, following a league-led inquiry that resulted in fines and draft-pick penalties.
Federal prosecutors in the Eastern District of New York have begun a criminal investigation into the Los Angeles Clippers over alleged attempts to bypass the NBA salary cap to compensate forward Kawhi Leonard, according to sources briefed on the matter. The probe, led by the U.S. Attorney's Office in Brooklyn, is in its early stages and has already issued at least one subpoena.
The investigation follows a nearly year-long NBA inquiry conducted by the law firm Wachtell, Lipton, Rosen & Katz, which concluded that the Clippers engaged in a pattern of misconduct and multiple significant rules violations related to salary-cap circumvention. The league responded with penalties that include the loss of five future first-round draft picks, a $30 million fine and a one-year suspension of owner Steve Ballmer. Leonard is required to pay $700,000 as part of his individual sanction.
No comment was received from the U.S. Attorney's Office, the Clippers or the NBA at the time of reporting. The federal inquiry marks the second government investigation into the team's financial dealings with Leonard, who was also linked to a separate SEC inquiry involving scoreboard manufacturer Daktronics.
"The league investigators said the Clippers directed a kickback from a scoreboard contract for the Intuit Dome to Leonard through an endorsement deal and set the terms of a multiyear agreement worth millions of dollars," the Wachtell Lipton report stated.
The Eastern District of New York has a history of high-profile NBA investigations, including the 2007 Tim Donaghy case and recent indictments related to sports-betting schemes.