Fallout for the Los Angeles Clippers and Kawhi Leonard from the NBA's salary cap circumvention investigation may be far from over.
U.S. Department of Justice prosecutors have opened a criminal inquiry regarding the matter, according to the New York Times.
News of the federal probe follows the revelation through a separate NBA investigation that the Clippers circumvented the league's salary cap rules, secretly helping arrange sponsorship contracts for Leonard that provided him income beyond the three-year, $150 million contract he signed with the team in 2024.
The U.S. Attorney’s office in Brooklyn is running the investigation, which the Times reported to be in its earliest stages, according to sources familiar with the matter. It remains unclear
if criminal charges will result from the federal investigation.
The NBA announced disciplinary action against the Clippers on Sept. 2, after a law firm commissioned by the league shared its findings with Commissioner Adam Silver.
The Clippers were hit with a $30 million fine and have to forfeit five first-round draft picks (2029-2033). Clippers owner Steve Ballmer and two of the team's top executives were suspended for up to a year.
Leonard was fined $700,000 for restitution related to covered personal expenses, but the star player was not suspended from playing during the upcoming 2026-27 season.
The federal investigation began before the league came forward with its findings last week, according to the Times report.
Leonard's status with the Clippers remains unclear for the upcoming season. He's expected to be traded by Los Angeles to the Toronto Raptors in a deal that was put on hold pending results of the NBA investigation.
The Clippers were expected to receive forward Brandon Ingram, guard Gradey Dick, two unprotected first-round picks (2031, 2033), two second-round picks (2030, 2033), and a 2027 first-round swap in the trade.
The trade was initially agreed on and reported on June 30. The teams acknowledged the deal but held off on executing it while the NBA investigation was ongoing.
USA TODAY has reached out to the Clippers for comment but has not heard back.
This article originally appeared on USA TODAY: Department of Justice opens criminal inquiry into Clippers, Kawhi Leonard | report
