The United States Justice Department will also be taking over to further investigate the Los Angeles Clippers' salary cap circumvention issue with Kawhi Leonard.
According to Michael Schmidt, William Rashbaum, and Santul Nerkar of The New York Times, federal prosecutors have opened a criminal probe into the NBA scandal.
The investigation is still in its early stages and is being handled by the U.S. Attorney’s Office in Brooklyn.
LA Clippers under investigation by US Justice Department over Kawhi Leonard salary cap scandal
Per the report, federal authorities began examining the matter even before the NBA handed down its brutal punishment against the Los Angeles Clippers.
Investigators are looking into whether Steve Ballmer and Clippers executives used hidden sponsorship deals to pay Kawhi Leonard outside the NBA’s salary cap rules, which involves the notorious no-show endorsement contract with Aspiration, a bankrupt environmental startup.
It remains unclear what the investigation covers, who is being targeted, or what possible crimes are being examined against the figures involved. However, prosecutors have issued at least one subpoena as part of the probe.
The NBA and the Clippers have yet to respond on whether they are cooperating with the investigation or have received the subpoena.
LA Clippers hit with harshest punishment in NBA history over salary cap scandal
Behind Wachtell Lipton's year-long investigation, the NBA dropped the hammer and imposed the harshest punishment in league history against the Los Angeles Clippers for manipulating the salary cap.
The organization was ordered to forfeit five consecutive first-round draft picks from 2029 through 2033, pay a $30 million fine, and submit to a strict five-year league compliance and monitoring program under the NBA.
Team owner Steve Ballmer has been issued a one-year suspension from all NBA and team activities, President of Business Operations Gillian Zucker has been handed a one-year suspension without pay, while President of Basketball Operations Lawrence Frank has received a six-month suspension without pay.
Kawhi Leonard has been fined $ 700,000, while his uncle and former business manager, Dennis Robertson, has been hit with a five-year ban from conducting any business within the NBA.
The Clippers have vehemently rejected the sanctions, vowing to pursue legal action against the NBA.