The NBA world is buzzing with questions about the contract between L.A. Clippers star, Kawhi Leonard, and a now-disgraced California company, Aspiration Partners, Inc., whose co-founder Joseph Sanberg agreed to plead guilty in August 2025 to two counts of federal wire fraud. In announcing Sandberg’s plea, the U.S. Justice Department stated that “for years, Joseph Sanberg used his position at Aspiration to deceive investors and lenders for his own benefit, causing his victims over $248 million in losses.”
The government’s case against Sandberg includes allegations that he used false bank and financial statements to obtain $145 million in loans and defrauded investors by concealing from them that he—as opposed to actual sales—was the source of revenue recognized by the company. According to the government, the fraud continued into 2025 and Sandberg, who will likely be sentenced later this year, presented investors with a fake letter from the company’s auditors, claiming it had $250 million at a time when the company had less than $1 million in available cash. There is no mention of the Clippers in the Sandberg press release, but both the NBA and Clippers have acknowledged the team is under investigation due to allegations that Clippers owner, Steve Ballmer, invested in Aspiration to circumvent the NBA salary cap.
The Clippers and Ballmer vehemently deny those allegations, calling them “absurd” and stating that Ballmer invested in Aspiration thinking the company was doing the right thing. The team further stated that although Aspiration was a team sponsor from 2021 to 2023, neither the team nor Ballmer “had any oversight of Kawhi’s independent endorsement agreement with Aspiration.” Meanwhile, on his podcast Pablo Torre Finds Out, journalist Pablo Torre reported there are documents showing the Clippers made payments to Aspiration that coincide in amount and timing with Kawhi’s contract with Aspiration.
Torre further reported that Kawhi never performed any services for Aspiration and raised questions about whether the agreement between Kawhi and Aspiration was intended to circumvent the salary cap. In other words—the question is whether the Clippers funneled money to Kawhi through Aspiration. Torre’s report has led to other questions, such as whether—if the allegations are true—the Clippers investment in Aspiration would be considered money laundering.
Is Funneling Money to An Athlete to Avoid the Salary Cap Money Laundering?
To be clear—the Clippers and Steve Ballmer have addressed Torre’s report and maintain they were duped by Aspiration, like other investors.
But what if a team funneled legitimate money to an athlete through a third party? Is that money laundering? The short answer is: no.
The federal money laundering statute, U.S. Code Section 1956, criminalizes domestic money laundering (the focus of this piece), international money laundering, and money laundering “stings” (undercover operations). To be convicted of traditional money laundering, the government must prove not only that a defendant conducted a financial transaction, but that it had some criminal purpose.
For example, to (1) carry out a specific crime, (2) avoid tax liability, (3) or with knowledge the transaction was designed to hide the illegal source of the money (“to wash the money”). More, the government must prove the actual source of the money was criminal and that the defendant knew the property involved was the proceeds of a felony.
As far as we know, none of these factors are present with the Clippers and Kawhi, even though Aspiration admitted it derived millions in investment and loans through fraud. Instead, the argument is that Ballmer and the team sent legitimate funds—that it could not pay Leonard directly because of the salary cap—to Aspiration.
So even if the Clippers actions may have violated NBA policy, which it denies, there is no basis to suggest the team, its owner, or Kawhi laundered money. To prove that case, the government has to show the money started out dirty.
