Kawhi Leonard’s Clippers saga has taken another unexpected turn. The NBA has already handed down one of the toughest punishments in league history over the team’s dealings with the seven-time All-Star. He was fined $700,000, while the Los Angeles Clippers lost five future draft picks and owner Steve Ballmer received a one-year suspension. Yet the fallout may not end there.

“Federal prosecutors have opened a criminal investigation into allegations that the Los Angeles Clippers helped arrange secret sponsorship contracts for the star player Kawhi Leonard that circumvented the salary cap,” according to The New York Times.

The probe is being handled by the U.S. Attorney’s Office in Brooklyn and remains in its early stages. Prosecutors have already issued at least one subpoena. However, it is still unclear exactly what they are examining, who could ultimately face scrutiny, or whether the investigation will result in criminal charges.

“The people briefed on the matter cautioned that it was uncertain whether the investigation would lead to criminal charges, or even result in evidence being presented to a grand jury,” the latest report stated. “They spoke on the condition of anonymity to discuss a continuing investigation.”

At the center of the broader controversy are endorsement agreements that Kawhi Leonard reportedly secured through his uncle, Dennis Robertson. One agreement in particular drew significant attention. The seven-time All-Star was linked to a reported $28 million endorsement deal with Aspiration Partners – a sustainability company that also had business ties with the Clippers and Ballmer, which later filed for bankruptcy.

The NBA’s investigation concluded that the Clippers had helped create off-court income opportunities for Leonard involving four companies.

Kawhi Leonard later acknowledged responsibility and wrote, “full responsibility for lapses in judgment by people within my inner circle and regret the distraction this situation has caused the fans and my family.” And further added that “no knowledge of any intent on anyone’s part to circumvent the salary cap.”

The Clippers, however, took a much stronger stance against the league’s findings and accused the NBA of conducting a biased investigation.

“We vehemently reject the NBA’s findings, which are the result of a heavily biased investigation seeking to justify a predetermined narrative rather than facts and evidence,” the Clippers said in a statement. What the league told us privately differs from what it announced today publicly, and they have not held themselves close to the standard Commissioner [Adam] Silver set at the start of this investigation to ensure its fairness and accuracy.”

The franchise lost five future first-round picks, covering 2029 through 2033. Team owner Steve Ballmer received a $30 million fine and a one-year suspension. Even the President of Business Operations, Gillian Zucker and the President of Basketball Operations, Lawrence Frank, received one-year and six-month suspensions, respectively.

Now, the federal prosecution adds another layer to this case. The Justice Department is also not the only federal agency examining the wider story.

The Securities and Exchange Commission has sought information from Leonard and Daktronics, a company that had one of the endorsement arrangements highlighted in the NBA’s report. Daktronics has said it is cooperating with that inquiry.

Let’s not forget that Kawhi Leonard’s deal to the Raptors is also pending.

“I have not been given any indication that the Clippers are trying to get tricky here, or that they are being spiteful to Kawhi, but they are not moving forward with this trade at this point,” Fischer reported.

“They are saying to Toronto, they are saying to Kawhi, they are saying to Brandon Ingram’s side that they’re working through their front office structure before moving forward with this.”

While the 7x All-Star wants to put this saga behind him immediately, the federal case will add more uncomfortable questions until the decision is made.