Justice Dept. reportedly investigating Clippers’ deals involving Kawhi Leonard

The Department of Justice has opened a criminal investigation into the LA Clippers’ alleged circumvention of the NBA salary cap through a series of endorsement deals with Kawhi Leonard, The New York Times reported Thursday.

Citing people briefed on the matter who spoke on condition of anonymity to discuss an ongoing investigation, The Times reported that the U.S. attorney’s office in Brooklyn is leading the investigation, which is in its early stages.

The people did not reveal the target of the probe or what potential crimes are under review. They also said it was unclear whether the inquiry would lead to criminal charges or be presented to a grand jury, but prosecutors have issued at least one subpoena.

The Athletic reached out to the Clippers and the attorney’s office for comment, but did not receive an immediate response from either. A spokesman for the NBA declined to comment on the report.

The report comes a week after the Clippers were severely punished by the NBA for funneling millions to Leonard through four separate endorsement deals with team sponsors, including one with Aspiration first uncovered by journalist Pablo Torre on his podcast “Pablo Torre Finds Out.”

The NBA stripped the Clippers of five first-round draft picks and fined the franchise $30 million after a yearlong investigation concluded the team circumvented the league’s salary cap rules in signing Leonard to multiple long-term contracts. Team owner Steve Ballmer was suspended a year “for knowingly seeking to help Mr. Leonard obtain off-court income opportunities,” according to the NBA. Two other executives were also suspended for their roles, including team president Lawrence Frank for six months, and Leonard was fined $700,000.

The Clippers vowed to fight the NBA’s punishment and “vehemently” rejected the investigation conducted by the law firm Wachtell Lipton, with attorney David Kelley calling it a “witch hunt” that was the product of “a heavily biased investigation seeking to justify a predetermined narrative rather than facts and evidence.”

In June, the Clippers and Raptors agreed to a trade that would return Leonard to the Toronto Raptors, with whom he won the 2019 NBA title before joining the Clippers. Toronto opted to hold off on the deal until the NBA completed its investigation. The trade has yet to be finalized.