Kawhi Leonard to Raptors trade on hold until NBA finishes cap circumvention investigation

Thursday marks the day that previously agreed-upon trades in the NBA can be finalized with the start of the new league year, but one deal isn’t taking place — at least not for now. The the massive trade for Kawhi Leonard between the Los Angeles Clippers and Toronto Raptors is on hold, and won’t be completed until the NBA has completed its 10-month investigation into the star and the Clippers for alleged cap circumvention.

That investigation began after bombshell reporting by Pablo Torres seemingly uncovered a scheme by the Clippers to pay Kawhi Leonard money in addition to his NBA contract through “Aspiration Partners,” a company the Clippers invested in. This company would pay Leonard as a no-show employee, which Torres said was a way for the Clippers to pay him above and beyond his max-level contract.

The Clippers continue to deny any wrongdoing, while remaining confident the trade will eventually go through, releasing a statement to ESPN:

For the past 10 months, our organization has fully cooperated with an NBA investigation, participating in dozens of interviews, providing tens of thousands of documents, and facilitating access to our staff. While the process has been challenging, we have remained committed to transparency.

On June 30, we reached an agreement in principle to trade Kawhi Leonard to the Toronto Raptors. We have since been informed that the trade can only be finalized if the Raptors’ ownership group assumes the risk of penalties related to Kawhi’s contract that could theoretically result from the ongoing investigation. The investigation is ongoing, and we expect the trade to be finalized following its conclusion.

At the heart of this investigation are Joe Sanberg and Aspiration. We did not funnel money to Kawhi Leonard through Aspiration. Like many sophisticated investors, financial institutions, and business partners, we were victims of a fraud initiated by Sanberg, who has been convicted and sentenced to 14 years in prison.

We recognize the uncertainty this has created and the impact it has had on our team, our fans, the Raptors organization, their fans, and the players whose futures remain affected while this process continues.

We remain confident that, when the facts are evaluated fairly and thoroughly, the NBA will confirm exactly what we have said from the beginning: We have not done what we are accused of doing.

Meanwhile the Raptors released their own statement from the other side, seemingly also hopeful the trade will go through.

Regarding our planned trade with the LA Clippers for Kawhi Leonard, the NBA League Office informed us that as a result of an ongoing investigation involving the Clippers, we would assume the risk of any potential outcome of the investigation regarding Kawhi.

In light of this, we will wait until the league’s investigation is complete.

The Raptors remain eager to bring Kawhi back to Toronto and look forward to a swift resolution for our players, our organization, and our fans.

It appears as though Toronto has put the brakes on the deal for now until it knows exactly what it is getting itself into. The predominant risk for the Raptors would be to broker this massive trade, send away their players and draft capital — only to have the NBA then void the remaining years of Leonard’s contract, or suspend him for a significant time as a result of their investigation.

It’s expected the deal could be completed as early as Tuesday of next week, when the league is set to hold its Board of Governors meeting.