A criminal investigation into whether the Los Angeles Clippers helped orchestrate secret sponsorship arrangements for Kawhi Leonard as a way to circumvent the NBA's salary cap has been opened by federal prosecutors, according to people who spoke with the New York Times.

The probe is being conducted by the U.S. attorney's office in Brooklyn, a district with an extensive track record of pursuing cases involving professional sports leagues, according to two of the sources. Scrutiny from federal authorities reportedly predates the NBA's own disciplinary action against the Clippers, Steve Ballmer, Lawerence Frank and Gillian Zucker, which followed findings from an outside investigation conducted by law firm Wachtell, Lipton, Rosen & Katz on the league's behalf.

Details on who or what specifically is being targeted remain unclear, though at least one subpoena has already been issued as part of the inquiry.

Central to the inquiry is likely a set of undisclosed endorsement contracts Leonard entered into, and whether Ballmer and other Clippers officials played a role in arranging them as a workaround to pay Leonard beyond what the salary cap permits.

The federal probe adds another layer of difficulty for a franchise already grappling with the fallout from the league's punishment and a highly critical independent report. Sources said the Clippers and Ballmer are weighing their next steps, including a possible legal challenge against the NBA that could involve seeking a restraining order.

It remains far from certain whether the investigation will culminate in criminal charges or even reach the point of grand jury review, according to the sources, who spoke on condition of anonymity given the ongoing nature of the case.

The Eastern District of New York's U.S. attorney's office has built a reputation over roughly 20 years for pursuing sports-related corruption cases. In 2007, the office worked with the FBI to prosecute an NBA referee who admitted to betting on games he officiated.

Questions about the Clippers' financial dealings with Leonard first surfaced publicly in September 2025, when journalist Pablo Torre raised them on his podcast, prompting the NBA to commission its own investigation. Leonard signed a three-year, $100 million-plus contract in July 2019, but Wachtell's findings indicated that his uncle and representative, Dennis Robertson, pushed the Clippers into providing additional compensation worth tens of millions more through endorsement deals that violated league rules.

None of those endorsement agreements were ever made public, and Leonard did not perform promotional work tied to them. One arrangement that drew significant attention was a $28 million deal with Aspiration, a now-defunct sustainability firm that had separately struck agreements with the Clippers organization and Ballmer himself.

Wachtell's report, released earlier this month, concluded the Clippers had "affirmatively initiat[ed] off-court income opportunities" connecting Leonard to four separate companies, in violation of league policy. The NBA subsequently identified what it called a "pattern of misconduct and multiple significant rules violations" and handed down some of the most severe penalties in its history.

The Clippers agreed to trade Leonard to the Toronto Raptors in June, but that trade has yet to become official despite the NBA deciding not to issue a punishment that would impact his availability in the coming season.