Federal prosecutors in Brooklyn have opened a criminal investigation into the Los Angeles Clippers over allegations the team funneled money to Kawhi Leonard through "no-show" endorsement deals to get around the NBA's salary cap. The New York Times broke the news Sept. 10, and prosecutors have already issued at least one subpoena. The investigation comes just over a week after the NBA finished its own nearly year-long investigation, which found the Clippers had a "pattern of misconduct." The league fined the team $30 million, stripped it of five future first-round draft picks, suspended owner Steve Ballmer for a year, and ordered Leonard to pay back $700,000. The alleged scheme involved companies including Aspiration, Boingo Wireless, Daktronics, and Lockton Insurance signing Leonard to endorsement deals in exchange for business ties to the team.

1. Federal Prosecutors Aren't Done Just Because the NBA Is (U.S. Attorney's Office, Eastern District of New York)

This is a separate legal track, and the league's punishment doesn't close it.

Prosecutors now have a live criminal case underway. Brooklyn's U.S. Attorney's Office opened a criminal investigation into the Clippers' arrangement of endorsement deals for Leonard and has already issued at least one subpoena.

The office says the probe is still in its earliest stages. Prosecutors haven't disclosed a theory of the case, a target, or what charges, if any, they're considering.

The NBA's internal punishment doesn't stop a federal case. The league can fine and suspend people under its own rules, but questions of federal law are a separate matter for the Justice Department to decide on its own timeline.

2. Ballmer and the Clippers Call It a Witch Hunt (Steve Ballmer's attorney David Kelley, the Clippers organization)

The team says the NBA already punished it unfairly, and this piles on.

Ballmer's attorney says the NBA never gave the team due process. In a letter to Commissioner Adam Silver, David Kelley said the league promised the investigation would be fair and evidence-based, then broke that promise.

The Clippers say they broke no rule that existed at the time. The team argues no NBA rule barred staff from introducing sponsors to players at a player's request, and Kelley wrote that the league is "retroactively punishing" it for a rule that never existed.

The team says Ballmer was himself a fraud victim. The Clippers note that NBA attorneys reportedly believe Joe Sanberg, Aspiration's former co-CEO, defrauded Ballmer, and say they're "exploring every legal remedy to address this gross injustice."

3. The NBA Says the Case Is Already Closed at the League Level (Commissioner Adam Silver)

The league ran its own investigation, found real violations, and considers the matter resolved.

Silver says the misconduct was real and serious. He called himself "deeply disappointed by the flagrant violations of our rules and by the Clippers' institutional and leadership failures."

The league says the penalties match the violations. Silver said "the severity of the penalties reflects the seriousness of the violations," after an outside law firm spent nearly a year investigating.

The NBA doesn't treat this as a technicality. Silver has described the league's compensation system as "a fundamental component of the basketball competition that the league oversees for the benefit of the teams and players and ultimately the fans."

Where This Lands

Prosecutors are just getting started, and they haven't said what they're looking for or whether charges are coming. Ballmer and the Clippers say they were already punished on a rule that didn't exist and are looking for legal remedies. The NBA says its own investigation found real violations and the penalties fit them. A league fine is one thing. A federal subpoena is a different kind of problem, and it's the Justice Department's call alone.

Sources