The Clippers Scandal vs. the Corporate Enforcement Record

This is part of a series; read Part I here.

Clippers owner Steve Ballmer landed himself in NBA jail, a one-year ban from team activities and games for a year. There’s a tertiary character in this story who is in actual jail right now, but even that 14-year federal prison sentence may not be the most resonant compliance lesson from the whole affair.

The Wachtell, Lipton, Rosen & Katz report released last week and covered in the first part of this series documents a failure of due diligence, of internal controls, of executive judgment and of the organizational discipline that ensures public statements and private conduct are even in the same arena.

The real criminal & greenwashing

Today, Joe Sanberg is also known as inmate No. 63886-511 at Lompoc I, a low-security federal prison in Lompoc, Calif. About 8 miles west is the Pacific Ocean, and to the north is Vandenberg Space Force Base, the site of more than a dozen SpaceX rocket launches this year alone. 

Each launch delivers sonic booms and vibrations extending for miles, all the way to the Lompoc prison, where its 3,000 inmates, Sanberg now among them, can feel the ground shake but not see the sky.

For five years, the DOJ says, Sanberg, a founder and member of the board of directors of Aspiration, a fintech and sustainability services provider, ran a scheme that bilked investors and lenders out of nearly $250 million. Sanberg pleaded guilty to two counts of wire fraud in 2025 and, on June 2, 2026, was sentenced to 14 years in federal prison. 

Sanberg, assistant US Attorney Bill Essayli said, was a serial fraudster who used his, “Cinderella-like background, impressive educational credentials and virtue-signaling skills to swindle investors and lenders out of hundreds of millions of dollars.”

Aspiration marketed carbon offsets, tree planting and sustainable banking to an environmentally minded customer and investor base. And the company delivered in part. Its consumer offerings, including debit and credit cards, were real, and that side of the business, since spun off under its own brand, GreenFi, is still operating today.

But its corporate business is where the real fraud happened and where both greenwashing and the Clippers come into play. Aspiration sold carbon offset and sustainability services to other companies, and that part of the business accounted for a majority of its revenue thanks to a cocktail of sham deals, secret self-payments by Sanberg and overstated letters of intent Aspiration booked as signed contracts.

Ballmer lists himself among Sanberg’s victims, but an investor lawsuit has named Ballmer as having been part of the fraud by funneling money to Leonard. The Clippers and their owner were undoubtedly on the buying end of Aspiration’s services, perhaps unknown to them at the time as greenwashing. Aspiration was the team’s founding arena partner and jersey-patch sponsor under a $383 million deal, and Ballmer personally invested $60 million in the company across 2021 and 2023. In 2022, as detailed in the first part of this series, Ballmer also approved a separate $7 million annual sustainability contract with Aspiration for The Forum — another arena he owns — with a four-year total the team’s consultant would later tell Wachtell investigators he had been handed as a budget to spend, rather than having calculated based on the facility’s actual emissions.

The lawsuit filed by 11 former Aspiration investors paints Ballmer as another defendant, not a mark. Their complaint calls the billionaire “the perfect deep-pocket partner to fund [Aspiration’s] flagging operations and lend legitimacy to [its] carbon credit business.” Ballmer’s attorneys have moved to dismiss.

How much dispassionate vetting the Clippers or Ballmer did of either Aspiration or Sanberg is unknown. In his letter to the sentencing judge, Ballmer’s attorney describes an investment decision based on trust in Sanberg’s statements and a shared passion for sustainability.

Sanberg’s public persona was disarming: a Harvard and Wall Street pedigree, anti-poverty crusader, board seats at the Sierra Club Foundation and impact-adjacent nonprofits, a briefly floated 2020 presidential run on an end-poverty platform. But a proper third-party risk management process or vendor due diligence would have revealed multiple reasons for pause:

• A publicly disclosed failure by Sanberg’s affiliates to fund the majority of private placement commitment at Blue Apron.
• A 2023 Aspiration funding round funded almost entirely by Sanberg, his co-defendant, Ballmer and Ballmer’s longtime friend.
• Growth projections propped up by promised customers whom people inside Aspiration were not permitted to contact — because they weren’t real.

Did vetting happen? Was it not effective? Was it ignored? 

Compliance

The Clippers’ Anti-Compliance Playbook

by Jennifer L. Gaskin

September 3, 2026

Report details host of cultural, compliance & governance fouls

Read moreDetails

Does the punishment fit the crime?

Aside from the Aspiration fraud, this story isn’t obviously about criminal conduct. What Leonard, his uncle and team executives did is perhaps skeevy, and in some ways oafishly so, but strictly speaking, it’s not obviously criminal, though it’s possible a prosecutor could advance a novel legal theory to the contrary. (As noted, Ballmer has been named as a defendant in civil litigation).

But the activities of the Clippers, Leonard and Dennis Robertson, as discussed in the first part of this series, bear a striking resemblance to the kinds of conduct state and federal corporate criminal enforcement is designed to prevent and, sometimes, punish.

And it’s worth considering how the $30 million in fines and loss of draft picks for the team, as well as the $700,000 fine against Leonard, compare to enforcement actions with similar fact patterns.

In those settings, namely at the DOJ, a series of factors can be mitigating or aggravating, and the DOJ’s Criminal Division uses a policy, the CEP, to guide how they deal with companies they are investigating. That policy is meant to encourage companies to self-report illegal acts they discover inside their organizations, and it establishes a series of fine reductions companies can receive for self-reporting and other “good” conduct after the fact, up to and including the coveted declination of charges.

If this case were a white-collar criminal proceeding, would anybody involved have won themselves any points in front of the Justice Department? It’s hard to see how they could have. Consider:

• The Clippers didn’t self-disclose; the story was broken by investigative journalists, and Ballmer and the team later claimed in the media that, one, salary cap circumvention could not have taken place; and, two, that the NBA had found no evidence it did.
• The team is also not a first-time offender, having been fined in 2015 for trying to circumvent the salary cap.
• And its cooperation posture, according to Wachtell’s report, was “adversarial and obfuscatory,” though it’s fair to note here the people on the other end of the table in this case weren’t government lawyers. 

In a white-collar criminal context, the closest analog to the Clippers’ conduct is in the arena of FCPA enforcement, where the government has spent years punishing companies for using third-party intermediaries to funnel improper benefits to individuals whose favor the company wanted.

Several FCPA patterns at the DOJ and SEC are reminiscent here. In each case, a company used a legitimate commercial relationship as a vehicle for an improper benefit delivered to someone whose good favor the company sought. The specific instruments vary — consulting agreements, side letters, family-member employment — but the pattern is the same, and it’s very much like the pattern the Wachtell report describes.

• Reimbursement of real commercial counterparty for delivery of improper payment, Cognizant Technology, 2019, declination: Cognizant arranged for a construction contractor to pay Indian officials for a permit and then reimbursed the contractor through inflated change orders on a legitimate construction contract. Cognizant avoided corporate prosecution under the CEP because it self-disclosed and cooperated, though two executives were individually charged. (Their cases were dismissed after the 2025 FCPA recalibration.)
• Sham commercial contracts, Siemens, 2008 ($1.6 billion total global penalty) and Alstom, 2014 ($772 million penalty): In each case, companies used so-called consulting agreements that generated no meaningful services and existed solely to move money to officials whose decisions the companies were buying. 
• Explicit quid pro quo linkage between contracts, Halliburton/KBR Nigeria, 2009 ($579 million combined settlement): KBR used a consultant to funnel about $180 million to Nigerian officials explicitly in exchange for specific contracts, with the payment linkage documented in internal communications.
• Family-member intermediary, JPMorgan, 2016 ($264 million settlement): JP Morgan systematically hired relatives of Chinese government officials and state-owned enterprise executives to secure investment banking mandates. The FCPA treats benefits to a close family member as benefits to the principal.

Which brings us to how the NBA’s punishment of the Clippers stacks up. At the end of the spectrum is the coveted declination, which the team would have no hope of, and at the other end is a penalty in the low billions globally. Where the Clippers penalty sits on that spectrum is up for debate, but compared to the team’s operating income, the $30 million fine is about 20% of what the Clippers made in 2024-25, their best recent year. That places the fine in the realm of what other companies have paid compared to their global income.

But for the team’s multibillionaire owner, it would be the equivalent of a person with a net worth of $100,000 being fined $19. It’s a rounding error. Calling it a drop in the bucket is an insult to drops in buckets. 

Compliance lessons learned

It’s easy to see this case as uniquely sports-related. Most compliance practitioners don’t work in companies under a cartel-like system where a centralized body does the rule enforcing, as in the case of the NBA and other sports leagues. 

But the organizational failure patterns here are instructive regardless of industry:

• Training does not equal good conduct.
• An organization committing the same type of misconduct twice is a clear signal of cultural dysfunction. 
• Lack of a whistleblower report does not mean everyone is happy with the behavior. When the person at the top of the org chart positions themselves as an advocate for a star performer, an internal control or hotline function has nowhere left to escalate. 
• Keeping a star performer happy may be more trouble than it’s worth.
• ESG and sustainability partners require the same diligence as any high-risk third party, and the virtue positioning of a counterparty — charitable work, board seats at impact nonprofits, an admirable personal backstory — is not a diligence substitute.
• A rule written specifically because of your organization’s prior conduct is the last rule you can afford to violate.
• External media investigations may be doing the work internal reporting channels are meant to do, and finding out about alleged bad conduct on a podcast goes way beyond a PR problem.
• A reverse-engineered paper trail will lead investigators right where you don’t want them.