FEDS COME KNOCKING: Clippers' Kawhi Dealings Now a Criminal Investigation
Hold onto your playoff hopes, Clipper fans — this just got real.
The U.S. Attorney's Office for the Eastern District of New York has opened a criminal investigation into the LA Clippers over allegations the franchise schemed to bypass the NBA's salary cap in order to pay Kawhi Leonard, according to The New York Times.
Yes, you read that right. A criminal investigation. This isn't just a stern memo from the league office anymore. Federal prosecutors in Brooklyn are on the case, though sources say it's still in its earliest stages.
The Fallout So Far
The NBA already dropped the hammer on the Clippers back in September after a near-yearlong league probe led by the law firm Wachtell, Lipton, Rosen & Katz found a pattern of misconduct and multiple significant rules violations.
The punishment was brutal: five future first-round draft picks lost, a $30 million fine, and a yearlong suspension for owner Steve Ballmer. Leonard himself was hit with a $700,000 fine.
But now the feds are sniffing around, and at least one subpoena has already been issued.
The Scheme, According to the NBA
League investigators said the Clippers orchestrated a kickback from a massive scoreboard contract for Intuit Dome and directed that money to Leonard in the form of an endorsement deal. Worse, the team reportedly helped set the terms of a multiyear agreement worth millions. Translation: They tried to pay a superstar under the table while pretending it was a clean business deal.
Not the Only Government Heat
This federal investigation is actually the second government inquiry into the Clippers' financial dealings with Leonard. On Sept. 2 — the same day the NBA announced its findings — an executive for scoreboard company Daktronics revealed on an earnings call that the U.S. Securities and Exchange Commission had reached out about its dealings with Leonard. Daktronics says it's cooperating and keeping its mouth shut beyond that.
Interestingly, the Eastern District of New York has a lengthy history with high-profile NBA cases. Back in 2007, the office prosecuted former ref Tim Donaghy for betting on games he officiated. More recently, it indicted Chauncey Billups, Terry Rozier, and Damon Jones in connection with illegal sports betting and rigged poker games tied to the Mafia. And this year, it indicted Malik Beasley and Ed Davis in an alleged sports betting scheme.
Now the Clippers — and a certain two-time Finals MVP — are the center of the feds' attention. The NBA already tried to make an example of this franchise. The U.S. government might be next.
Stay tuned. This story is just getting warmed up.