Pablo Torre Finds Out - Ballmer's Secret I.O.U., Aspiration's "Web of Lies" and the Zenith of Fraud: Kawhi-Gate, Part XI

Episode Date: June 5, 2026

As Adam Silver calls for the NBA's Kawhi Leonard probe to wrap up and Aspiration's co-founder gets 14 years behind bars, Pablo investigates how Steve Ballmer covered his tracks on a side deal of his own — and with the SEC on the case. Former DOJ prosecutor Lou Manzo returns to make sense of the relationship between a billionaire and a fraudster, while David Samson is finally convinced that the richest owner in sports has lost credibility.(Additional reporting by Anita Bennett)• Take the PTFO audience survey• Subscribe to Pablo's newsletter• Subscribe to "Nothing Personal with David Samson"Previously on PTFO:• Part I: The Silent Superstar and the Rotten Apple Tree• Part II: An Argument with Mark Cuban• Part III: The Mystery Investor, the No-Show Payday and the "Smoking Gun"• Part IV: Steve Ballmer, the Other Cuban and the $118 Million Infusion• Part V: Steve Ballmer's "Inconceivable" Donation, the $20 Million Guarantee and a Head on a Spike• Part VI: An IRL Showdown with Mark Cuban• Part VII: The Briefcase, Ballmer's Social Network and Aspiration's House of Cards• Part VIII: Uncle Dennis, Ballmer's $50 Million Sprint and the Side Deal That Wouldn't Die• Part IX: Ballmer's Tree Money, the Whistle-Blowers and the Document You've Been Waiting For• Part X: Steve Ballmer's Victim Impact, the Man Who Prosecuted Aspiration and the Abacus of Incarceration(Pablo Torre Finds Out is independently produced by Meadowlark Media and distributed by The Athletic. The views, research and reporting expressed in this episode are solely those of Pablo Torre Finds Out and do not reflect the work or editorial input of The Athletic or its journalists.) Hosted on Acast. See acast.com/privacy for more information.

Welcome to Pablo Torre finds out. I am Pablo Torre, and today we're going to find out what this sound is. You could go to the SEC and say, you know, sorry, we disclosed it, but we didn't disclose enough. That's a more common issue, right? Where you don't disclose enough, but the fact that there's no disclosure at all is pretty egregious. Right after this ad. David is... Svitzing? Big time. You're a potel, baby.

David, I want to thank you for doing this, given that you're beaming in from Germany for this. for this emergency episode. It is a time of day that no one should be speaking as loudly as I'm speaking in a hotel room. Part 11 of our aspiration series demands this. Lou Manzo,

we are joined again by him here in New York City, David. This is, of course, a longtime TTIO listener turned new special legal analyst who is subbing in for Amin al-Hasson, who is in a foreign territory known as San Antonio for the NBA Finals and what Lou lacks in, I would say, a credible Doc Rivers impression.

He makes up for in literally being the former Department of Justice prosecutor who launched the federal government's investigation into Aspiration co-founder Joe Sandberg. Back in 23. Right. So I should recap here for everybody, David. Lou was not one of my sources when we started this series in September of 25. He was merely listening. We finally got in touch for the very first time earlier this year on the dating app,

known as LinkedIn, which has become, I would say, decreasingly helpful for my reporting now that people know that I'm creeping around there. You know, I always like it when you click on my profile. I check it out. We are watching each other. But the thing I immediately discovered, David, that I learned about Lou that's relevant here is that be whistled or complaint that you and I and Amin read aloud from at Sloan live as you sat in the chair that Adam Silver sat in in spring of 26.

This was something that Lou had read in, yes. In the spring of that year, meaning he had also already considered, vetted the witnesses inside of aspiration, who had specifically mentioned in writing under penalty of perjury that aspiration had found a way to, David? Pay Clippers forward, Kauai Leonard, an incentivized bonus to circumvent the NBA's salary cap disguised as an organic marketing sponsorship agreement. And this was a more complaint, the very same one, would provide Lou and the DOJ a roadmap for the successful prosecution, ultimately of Joe Sandberg. And what else can we say about this, Lou, before you caveat us into... Well, I should caveat it and say, again, I'm speaking without any personal knowledge of what's happened in the last couple years. I don't have a source inside DOJ. I'm not going to pretend I do.

And I can't talk about what I did at DOJ. But I can talk about kind of the T. Lee Friedian of what's happened in the last week and hopefully walk us through his sentencing. David, not everybody is happy that Lou is here. This is why Lou is saying this in part. It's amazing, Pablo. You bring in a guy who starts off sort of hands up, can't talk, does a great episode, very important, and he's back. I had it four to one that we'd never see Lou's face again. Well, unfortunately, for certain defense attorneys who may or may not have placed a court filing into the public record last week, Lou is back. And I would like you, David, to now read one reaction from Joe Sandberg's attorneys to the aforementioned episode that we did together. Equally stunning and prejudicial is that a former DOJ prosecutor who was, who was a former DOJ prosecutor who was,

involved in this case appeared on a popular podcast on May 5th to offer commentary about sentencing in this case while it is still pending. And my favorite part is that after that they put in parentheses C

HTTPS slash www. www.p.p.combo-d-show slash p-slash the DOJ's aspiration prosecutor joins, which is, of course, a newsletter that you can subscribe to. I appreciate everybody digging through court

filings to actually get away to subscribe. I also want to thank Lou for having the balls to come back. Well, you know, I think it's important that people take their legal responsibilities seriously, but also speak out about issues, especially things that are going on at DOJ. I was just struck by the entire sentence, Lou, because I'm trying to figure out, having gone through that episode again, because I was there exactly how it's prejudicial, because what that would mean is that the judge was watching the show and had some sort of epiphany race sentencing because of our show. And I'm sorry, but I found that as much as I respect all three of us, not in a particular order, but you'd be first, that I do not believe we would sway the judge in

sentencing. But maybe I'm wrong. I also didn't think it was prejudicial to him. I mean, we... I agree. Yeah. But, you know, it's a defense attorney. I appreciate it. If I were the defense attorney, I would do the same thing and throw everything against the wall. and try and allege some misconduct against a former DOJ employee and try and pin it on DOJ, why not? But you'll notice in that line they didn't explain how it could be prejudicial,

just that it was generally prejudicial without anything other than the conclusory statement. And now that sentencing that was allegedly prejudiced is complete as of Monday, and we'll get to that in a second from inside of the courtroom in Los Angeles. But I also need to point out that we here at Pablo Tori finds out,

were not merely condemned by Joe Sandberg's high-powered defense attorneys. We were also condemned by Clippers owner Steve Ballmer and his high-powered attorneys, of course. Lou, if you could read this excerpt from the victim impact letter that Balmer personally tweeted out in April. Mr. Balmer's connection to Sandberg is what caused a former talking head and television personality, Pablo Torre, to launch a relentless vitriolic public campaign against Mr. Balmer, alleging principally based on anonymized gossip as well as on a misapprehension or intentional disregard of the facts that Mr. Balmer conspired with Sandberg and aspiration to engage in the circumvention of the NBA salary cap by virtue of an endorsement deal between aspiration

and one of the team star players, Clyde Leonard. So beautiful, Pablo, because if you read these two, quote, side by side, it is virtually impossible even for a Harvard guy. to walk the tightrope where you do a show where both sides say you screwed them. And it just is a chef's kiss to journalism that you could do a show that both sides believe put them in a position where they had to fight back. I should say that both Sandberg and Balmer and me, incidentally, all Harvard guys. And they're ganging up on, you know, the journalist, both the alleged scammer and his alleged biggest victim, which, to David's point, does feel like an award we should be honoring in some regard as we move forward here.

But this shared dynamic between Balmer and Sandberg may in fact say something quite poetic, even interesting, about their relationship, however unintentionally. Because one thing that I do want to tell you guys is that the reason you're both here is not merely to recap the sentencing. It's also to help me understand a side deal that both men made, and manage to keep extraordinarily quiet for five fucking years. Until, of course,

this new episode of their favorite podcast. It's me, Pablo. We have been very interested in what you guys actually like about this show. And so in the show notes, there is a survey. You'll find it magically as a link somewhere down there. And you can tell us what you want more of, what you want less of,

what annoys you about me, and potentially all of my friends. We will use this to improve the show. It takes like 30 seconds, so please fill it out, and we will make this better, allegedly. I do want to set the scene here because something we've been anticipating for now years, actually, happened at the federal courthouse in downtown Los Angeles on Monday,

and our court reporter Anita Bennett was there filing dispatches for us watching Joe Sandberg enter the room in off-white jeans and a blue sweater over a striped baby blue shirt and sneakers. And at long last, Lou, the case that you started back in the spring of 2023 culminated with a federal prison sentence as pronounced by Judge Stephen V. Wilson

of how long in the end? 14 years. Aspiration founder Joseph Sandberg has been sentenced to 14 years in prison for defrauding investors of $248 million per Baxter. He and the clippers are being investigated by the NDA for paying Kauai under the table. Nothing to see here, Joe. The 14 years after, again, this case was your baby at the DOJ,

how did it feel seeing that substantial a number? White collar sentencing is difficult because there's a lot of variance. But I think you can compare it to a couple of the major fraud cases that have been in popular media lately. Elizabeth Holmes, she got 10 years for Theranos, which was a major fraud, institutional investors, kind of similar things where, you know, doctored financial documents, doctored presentations, that kind of thing led to huge investments, ultimate financial collapse. And that was a health product.

Yes, this is blood testing technology that she defrauded investors about because it was not real. And she went to trial, and she was convicted. And so a huge expense of resources, both for the court and to the government. and whatnot, and she got 10 years. And then you've got Charlie Javitts in New York. That was the Frank case where she sold her business to J.P. Morgan. It was all fraud. She went to trial, got convicted. Again, huge expenditure of resources, seven years. And this guy pled guilty pretty promptly in the course of the investigation, and he got 14 years for something that didn't involve health. But it did involve five years of fraudulent documents, and I think that's probably what got the court's attention

the most. What shocked me, Lou, is that the bid in the ask year was 17 and a half and zero. Yeah, that's a huge delta. That is a huge delta, and where he came down was clearly on the side of the DOJ. Well, I want to clarify that the DOJ recommended, yes, the sentence of 17.5 years based on total losses in their accounting of $248 million, a wide-ranging scheme to defraud multiple. lenders and investors over that five-year period. And Judge Wilson, David, he did say this, according to our court reporter. The history of this defendant is that he is charitable, wants to do good things, wants to do things that he thinks are important.

But the circumstances are among the worst that I've ever encountered in my 40 years serving here. He started with altruistic intentions, but he became entangled in a web of life. that continued for four years. I would put the grade of this fraud at the zenith. That's so high. It's literally the highest. I've never seen language like that. The highest possible point, the zenith, I believe.

I don't know what happens going forward for this judge because if this is the zenith, definitionally, no one will get 14 years in his courtroom again. Yeah, Lou, what Sandberg told the judge on Monday, in part, was, quote, my moral compass, end quote. And he and his lead defense attorney, Mark McCasey, former Trump attorney, declined comment after the sentence came down. In my mind, maybe he was hoping for a seven or an eight. Fourteen definitely sticks out. But again, when you're going to jail for that long

of time, the difference between a seven and a 14 might not really hit you until you've been in for a couple years. Well, it may not hit you until you leave the courtroom. Yeah. Because we also have this exclusive video, B-roll of Sandberg outside the courthouse, David. Could you describe what we're seeing here? I'm seeing someone basically gesticulating as though they cannot believe what happened, holding a file saying, did this just happen? Am I really 14 years? I can't read the lips exactly, but it looks as though he's less than happy.

And the judge did not grant his request to report after the Jewish holidays, which was one little tiny he wanted to take care of his sick mother and be with her for the Jewish holidays in September, October, and no, he's got a report in August. Right. And so I do want to describe here, by the way, just some of the human costs that sort of account for why it was 14 years because Sandberg presented this attempted portrait

of a sympathetic figure, a good guy with a good heart. But there are also these victims that show up in the DOJ's memo as well as in the courtroom. People that Sandberg conned through his relationships and sponsorships and celebrity investors and one of them

who showed up in person, in court, was a woman who invested in September of 2021, quote, $5,000 in aspiration. And I was a mother on the poverty line.

What I see for Joe is that he's excellent at public relations, but he really does not care about people. And quote, and then in the DOJ's memo filed before the hearing,

there was the 80-year old widow who paid Sandberg half a million dollars in July of 24. There's the single mother who gave Sandberg another half a million dollars in August of 24. There is the military widow whose husband died by suicide in Iraq who lost $100,000. This was some of the roster that helps sway the math towards the bigger end of that spectrum, David. Well, we call them in law school. I'm sorry to tell you, widows and orphans. The more widows and orphans you can get to be defrauded, the better chance you have of getting the bigger sentence

because it is a terrible story to tell. Steve Baumer losing $60 million is not even remotely close to a widow losing $100,000 or $10,000 or an orphan losing $5,000. So you're looking for the most people you can find to come provide victim impact statements and actually show up to the hearing if you're the DOJ, because it's more meaningful. And I think that's what separated this from Elizabeth Holmes and Charlie Javits is that it's not just, you know, UBS or JPMorgan or Sequoia, but individuals with investments as small as $5,000, which is pretty shocking if you are trying to raise money for a, you know, $100 million, $200 million business and you're taking in $5,000 investments.

That's unusual. Well, this was part of the story was that Joe Sandberg was trying to take this company public via SPAC. and this is the pandemic era, right? So it's ESG, meaning it's the, we're the good guys. We do environmental stuff during this era in which going public via SPAC, meaning you would inhabit this vehicle that would be a public offering, a stock to buy in the public markets. The whole premise was, how can we generate as much revenue

to justify the biggest possible valuation? Right, yeah. And this was a weird time in America. We're using a SPAC to go public as opposed to an IPO was a different, format or in different standards of due diligence where you could get away with with information in a SPAC that was was less investigated and go faster. So that's what a lot of companies were doing and that's what aspiration was trying to do. And aspiration also didn't want to think of itself as a bank, right? It was as a tech company. And so how does tech work? It depends on revenue not profits.

That's how, you know, you're going to get a huge evaluation and to make your stock boom when it comes out. Driving revenue was the name of the game, and that's where we got into some of the round-tripping that sentencing. To put it in even more plain English, it's the way people got rich without any of the regulation that exists when you are doing an IPO. Right. And then, by the way, if you look today, it's basically falling apart. So the special purpose acquisition company, the SPAC, yeah, this is now a trend that's fallen by the wayside because it largely wound up being, I would say, embarrassingly messy as a concept in a public market. And the round-tripping, by the way, I do want to explain that because this is a recurring theme

in the story of how Joe Sandberg built up those revenues. Again, revenue, David, different from profit, revenue meaning simply the money you take in, not the net that you end up keeping. But the round-tripping here, Lou, how do you describe that in terms of how he was operating. Right. So if I have a dollar and I give it to you and then you give the dollar to David

and then David gives it back to me, I guess I could say I generated $1 in revenue, but nothing really changed. I gave a dollar and it just moved around the circle. But for, you know, tech companies, revenue is the big promise that you'll generate revenue and someday five years down the road,

10 years down the road, that'll somehow turn into profit. That's the model that they've gone on since the, you know, dot-com boom. what Aspiration was doing here and Joe Sandberg was doing was aspiration would pay Joe Sanberg. Joe Sandberg would pay intermediaries. Intermediaries would then pay aspiration. And so that's the round trip. And this whole thing where Joe would generate business that ended up actually being business that he was effectively funding that was getting paid back to him,

I do just want to reference that in the DOJ memo, one of the things they point out is that what Sandberg would be doing individually through his, own vehicles is paying for sham services presented as marketing and branding services often, which then paid aspiration. Then aspiration, when they went public via SPAC, would say, look at all the revenue we're getting. And then on the back end at that multiple Joe would profit, aspiration would profit, and that whole manufacturing of business would end up paying off. And the reason I say that is, of course, because when we zoom out to what we have been talking about when it comes to, wait a minute, Steve Ballmer,

has been paying aspiration and aspiration has been paying Steve Balmer and Joe Sandberg has been involved in this story as well. It reminds me that I should clarify that neither Steve Balmer nor the clippers were mentioned at this hearing in any capacity.

But this now underscores David, this conspicuous reality here, right? Which is that Joe Sandberg is going out of his way to create revenue in all of these tortured and manufactured ways. But in this corner of the union, in the sports NBA context, he is also paying Kauai Leonard millions of dollars to do nothing.

And Kauai Leonard, for those who have not been keeping up, not only got signed to a no-show $28 million endorsement deal that was kept secret, he also happened to receive a special put-right option on $20 million worth of aspiration equity that Joe Sandberg personally awarded him. And just so I can clarify, David, a put-right option means what in layman's terms? When you get an option, a put-right option, it means that you have the opportunity to cash in something that you have taken into your possession. You can take it into possession and then literally think of the word. You can put it back. I'm putting it back.

I'm giving it back to you. Give me back money. And so Kauai had the opportunity to say, hey, I don't want the shares. I'll take the money. Yeah, Lou, the way I've thought about this after consulting various securities experts is this is de-risking an investment, which is a hell of a benefit to negotiate off to the side. Right, you get a floor. And that's the benefit of this.

It doesn't go to zero. It goes to a floor. And that floor is negotiated in the contract. But it's only as good as the credit of the person who gives the put. Right. So if you get a put and you put stock back and the stock is, meaningless and also the person who are putting the stock back to doesn't have three nickels to rub together to make a dime, then what's the use of the put? So it doesn't eliminate all risk ever.

Ideally, you'd want that to be backed by a large company, a company that you feel could never go belly up, a company that will always have the ability to call back and take the stock back. And that certainly was not the case with aspiration. Yeah, all of it is to say that a put, if real, substantially changes the whole thesis and the risk profile of what this investment really is. So something that I need to clarify here, David, is actually the next thing I need you to help me table read here. Because how Joe Sandberg, again, guy now convicted in federal court to 14 years in federal prison, how he described this payment in another private email that we obtained that was, Sent to members of Asperation C-Suite does help clarify sort of the scheme he was running when it came to the basketball stuff.

For avoidance of doubt, any and all benefit to aspiration from the Kauai deal is being subsidized by my contributing my equity to make this happen. In conjunction with my offering to do that, I also explained verbally that Kauai's team wanted his legal fees paid. I'll state it here for you. I am transferring 20 million of stock to Kauai over four years to enable this partnership for aspiration. The benefits that you will get from this partnership are subsidized by my 20 million of stock.

Regards Joe. And, Lou, the phrase there that has always stuck out to me is the benefits that you will get from this partnership. Because it raises the question of like, so what do you have to gain by having Kauai Leonard's secretly paid. Nothing here makes sense, right? That you're going to have somebody who is very much not a dynamic speaker. It's a great basketball player, but not a dynamic speaker, and who has no social media presence and doesn't want to talk about anything but play basketball. Not sure why he would be a great sponsor. And then there's no reason why he'd be a great sponsor if you're not

going to tell anyone that he's even a sponsor. Let's just let that hang in the air a bit, as we point out, that Kauai's reps, Kauai, Aspiration, Joe Sandberg, and Steve Balmer never announced this. The original sin was that this was never announced, as Lou alluded to, as Steve Balmer continued to pour money into aspiration. This was personally and via the Clippers, while Kauai, yes, was getting paid by aspiration secretly. So before we get deeper into Steve Balmer's clippers, allegedly having a secret side deal with Joe Sandberg to circumvent the salary cap for Kauai Leonard, I should also note that there does remain an active lawsuit from 11 aspiration investors who are suing Balmer right now in civil court in Los Angeles. And what they allege is that Balmer has a secret side deal with Joe Sandberg that would have radically changed their decision to follow in the footsteps of one of the richest investors in the world by entrusting their money as well to aspiration. And, Lou, what they write in part is the following.

Plaintiffs would not have invested and or kept their investment in aspiration if Balmer and Sandberg had disclosed the true nature of Balmer's investment. But Balmer's lawyers, David, what they say in the Victim Impact letter that they filed on behalf of their client about Joe Sanberg is this. Mr. Balmer now understands that without his knowledge and contrary to the truth, Sanberg was touting a close relationship. with Mr. Balmer to other investors and using Mr. Balmer's investments to attract additional similar investors. This is particularly insidious, given that other than greeting Sandberg at a Clippers game, they had barely spoken. Indeed, Mr. Balmer recalls speaking to Sandberg only once, and that was only briefly while they both attended a public event. We have Zenith, we have insidious, we have really the heights of the emotional spectrum.

And one thing I need Lou to read here is a private email that I've obtained, written by Joe Sandberg. This from the month after Steve Ballmer negotiated his highly publicized $50 million investment. And this email was addressed to Ballmer's chief investment officer and right-hand money man, Brandt Vaughn, whose subject line is, quote, request for a reference, end quote. Brandt, I hope you're doing well. Will you be in L.A. for the Clippers opening night on October 23? I hope that will be the first of many games where you and I will get to cheer together. I'm also hoping you'd agree to act as a reference with a potential aspiration investor

who is considering purchasing the same security that Team Balmer purchased. The investor has recently asked to speak with you. Would you be willing to speak with the investor about your perspective on aspiration? Best, Joe. to which Brant Vaughn, Team Balmer's top money man, David, says, Hi, Joe, all good here. I unfortunately have a conflict on the 23rd, so we'll miss the game. I'm glad to speak with the investor.

Feel free to connect us. Thanks, Brandt. That was from October of 2021, that exchange, as was this email from Joe Sandberg to Aspiration Executives, Lou, that begins with a reference to Clippers' president of business operations Gillian Zucker, who works directly with Steve Palmer. Gillian is enthusiastic to support our success, and please count her as an ally who is willing to help us as often

as we would like her to help us. She is eager to contribute to our success. Please keep that front of mind. Also, Balmer himself is enthusiastic to help and will personally be a reference and advocate where we ask him. So please keep that front of mind also. And at this point, David, I just want to clarify, we've just had Lou Reed, an email from Joe Sandberg, noted fraudster,

who is describing all of the ways in which Steve Balmer and his associates would love to help aspiration enthusiastically. And maybe that's all a lie. At this point in the story, that seems possible at something we should acknowledge. The reason why I am not going to acknowledge that is that while he is a convicted fraudster, what we've seen already with the email exchanges is not a one-year. way made-up relationship, which as a former person in sales on Wall Street, I totally understand how you could spin that yarn. But the way we would spin it would not include emails that had this level of connection with the people we're talking about. It would always have a degree of separation.

And this is where David's refusal to play along with me does vindicate him because the next thing I was going to ask him to read is another private email sent just three days after that one. this one written by Steve Balmer himself. It was sent to Joe Sandberg and the CEO of Intuit as well. Since Intuit and Aspiration already have a business relationship and all of us share a passion for the clips and our Intuit Dome project, I thought it might be fun for the four of us to take in a game together sometime soon, with love for us to all get to know one another better.

Here are a few dates that work on my end, hoping one of these might work. If not, feel free to suggest a few others, or we can let the experts find the perfect time. Could December 8th against Boston or January 11th against Denver possibly work? All of which is to say that what Steve Ballmer's lawyers said in April of 2026 about how Balmer now understands that without his knowledge, Sandberg was using Mr. Balmer's investments to attract additional similar investors does not quite add up. It's just, I'm trying to figure out how a podcaster, a Pulitzer Prize winning podcaster is putting pieces of a puzzle together.

Talking head. Listen, he's graduated. Once you win a Pulitzer, you can no longer be called the Talking Head. The head still talks. The head still talks. It will always talk. I'm just shocked by this. And people, I don't want to get too far under the kimono.

I see these things for the first time here, and I'm shocked that they would take a position that is so easily refutable by the existence of actual emails, not speculation by a talking head podcaster. And so one of the things that Balmer wants you to think is that Joe Sandberg marketing his investment is insidious. But in fact, over and over again, what we're seeing is that Steve Balmer himself is personally helping Joe Sandberg use Clippers games in specific. to grow his credibility. The piece de resistance as we went through this is when we had a chance to really sit down and meet the folks from aspiration. Joe Sandberg, who runs aspirations here, he'll talk to you a little bit more about their company.

We can talk about our partnership. It's hard not to watch that clip and wonder to myself, is that what it looks like when you are first meeting a partner? And as someone who ran a team for 18 years, I would not be a part of a presser where I'm sitting next to someone and I am putting my name or the name of our owner

or our organization with someone and I have not done one ounce of my own due diligence. It's just, it is not credible to me. They're generally making statements that may, with your video evidence, be inconsistent with reality.

But the question of reality, though, it raises a related question, which we've been raising, David, ever since we dropped part one of the series, which is that Steve Balmer has kept characterizing his relationship with Joe Sandberg in that way that Lou just alluded to, inconsistent with reality, such that it seems like Steve Balmer was, yes, just one of the many other investors that Joe Sandberg scammed, as opposed to the most important VIP investor. This is not a fun thing to be through. I was personally defrauded.

Remember, they defrauded me, they defrauded many other investors much bigger than me. These were guys who committed fraud. How would I be able to? Look, they conned me. You're one of the richest men in America. They con me. I made an investment in these guys thinking it was on the up and up, and they conned me.

But the problem is that all the evidence that surrounds the things that he said, not even in that clip, but as part of the general PR that Balmer has used, is trying to paint a story of no relationship. And so to me, that's where he loses credibility. And once you lose the credibility, I have to call him to question anything he's saying about his relationship with Sandberg and aspiration.

The thing that Team Balmer wants to argue about, if I can summarize it in a nutshell, Lou, is that you podcasters, you may have a federal whistleblower completely, submitted under penalty of perjury by the two employees who helped take down aspiration co-founder Joe Sandberg. You may even have the signed and executed Kawhi Leonard contract, which was a no-show endorsement that never got announced by anybody. You may even have more than these 3,000 pages of documents and nine sources from inside the company corroborating all of your reporting.

But what you do not have is Steve Balmer himself personally disclosing the existence of a secret side deal with Joe Sandberg. And that threshold, just to be very clear about it, that seems pretty high. If you don't have a confession signed by the guy, then what are you really proving here? Right. In criminal law, when I was a federal prosecutor, you're always looking for that one email that says, hey, you know, here's the conspiracy. Conspiracy is usually not written out by words. It's circumstantial. So there's going to be parallel paths, and there's going to be a wink or a nod or just an agreement generally that can just be as short as one second, as long as many years. Very rarely do you have an email that says,

I agree to do X with you, and that's illegal. Well, the other reason with all that established that I really was excited to do this show with you both today is because, somewhat remarkably, we do now have Steve Ballmer in writing, thanks to his attorneys, saying, in fact, we did have a side deal with Joe Sandberg. And it's not exactly the one you might have thought, David. And so I would just like you to read this excerpt, yet another excerpt, from Steve Balmer's Victim Impact Letter, the one he conspicuously tweeted out for the world under the auspices of being duped,

because this next passage, this seemingly unassuming sentence, is a revelation for people like me who've been so many levels deep in this story. It is a sentence that speaks directly to the true nature of Steve Ballmer's investment. Mr. Balmer invested approximately $50 million on September 14, 2021, and $10 million on March 9, 2003. In an effort to further entice Mr. Balmer to invest, Sandberg personally guaranteed Mr. Balmer's $50 million investment by granting Mr. Balmer a put right for the value of his investment.

The reason this has been a bit of an asteroid into the theater of this story is that the people I've been talking to, this is current and former aspiration employees, current and former aspiration investors, none of them had any fucking idea for five years that this side deal between Joe Sandberg and Steve Balmer around the precipitating famous investment that was in headlines. existed. And so the very notion that Steve Balmer is admitting a half decade late that he had his own hidden arrangement with Joe, changing an investment of $50 million into a relatively, again, risk-free loan with a personal IOU that derrisked the celebrity VIP that came in to boost the reputation of the company. I mean, David, to describe how much this smells, it is hard to find the

right analogy. Yeah, this would get through even my COVID knows. Now, we can argue and quibble whether or not there is a duty to disclose this to other investors. It would have to do with what kind of LLC, whether it's a C-Corp and S-Corp. There's all sorts of different rules and laws that Luke can talk about if he so chooses. But the reality is that when you are using Balmer as really the ramp to get other investors into the company by touting this investment, and it's a risk-free investment for Balmer who takes the put-right and says, we're not going to tell anyone this, but thank God I've got my money back. Hey, you're not getting that put-right.

Thanks for your money. It just smells terribly to me. It feels like two big things, right? One is he's a different kind of victim, right? Because he had this backstop that other smaller investors, you know, the widows and orphans that came to the, DOJ sentencing did not have. So when Bomber says that he is a victim, true, he is a victim. He lost that money. He lost the money. It's all gone. But he had a very different deal than everyone else.

And the second thing that it makes me wonder about is about any kind of diligence that they must have done into Joe Sandberg, right? Because I can personally, you know, give a put right for $60 million, but that doesn't mean anything because I don't have $60 million. So you would think if you're a team bomber that you would do some diligence and some digging into Joe Sandberg at this point to see if that agreement is worth anything or if it's just a worthless clause that's being inserted. Yes. I mean, this is it, right? This is now getting to the nexus between two men, one of whom says very publicly, barely know him. Insidious. Had no idea he was using me in all these ways. and meanwhile you have another level to which there was a personal protection, a plan, and negotiation that was meant David to safeguard the very reason Ballmer came in, apparently in the first place. It doesn't matter the size of the investment, whether Balmer put in $50 million, $5 million,

whether he's worth $5 billion or $500 trillion. What a put-right option does when it's between two individuals, it tethers them. There's no other way that I can describe it, because in order, for the put to be worth anything, it has to be substantially possible for it to have an existing worth. Otherwise, what are we doing? So to me, this is absolute mind-blowing evidence that some could cause circumstantial, but the existence of this put-right is very real that would show that a relationship between Balmer and Samberg was not started the Tuesday before. One of the things I've been doing because I am not a securities expert. I'm not a lawyer,

unlike both of you, is that I've been consulting lots of people, whoever I can, to help me learn about this, understand it. And so I consulted two long-time securities lawyers, two preeminent law professors with SEC experience, two venture capitalists, all of them echoed that the whole thing smells. But one of those securities attorneys referred to me through a Harvard Law School professor, agreed to go on the record to explain exactly why, provided that I could clarify that he was not providing legal advice and that listening to this podcast does not create an attorney-client relationship, which, frankly, after dealing with Lou for this long, that felt fair as well. I am Pierce Hahn. I'm a partner in the Ice Miller office of Washington, D.C.

My practice is largely federal securities laws and corporate and M&A matters. What I asked Pierce Hahn was how big a deal, a publicly undisclosed put-right option between a big-name investor and the co-founder of a company raising money trying to go public via SPAC might be. It's potentially fairly serious. It's something that is material to the public or to other investors who may want to invest, that there's this side deal going on. The foundational principle with the SEC is it's not. known as Rule 10b-5, it's an anti-fraud provision. You're required to provide disclosures, right, and omitting material facts is the same thing, right? It's really fraudulent against the public market for the next investor to buy in, not knowing that there's a contractual put option,

right, for this big-name investor, or this big-name investor is getting some sort of benefit. And, yeah, it's even more egregious that it was guaranteed. I'm not as easy. or securities expert, how obvious is this to you? I mean, just the basic facts of this. Well, especially if this is a big name investor that's in this space and $50 million is not a small amount of money, this person, the investor, should have known. It's either a reckless disregard for the public or for other investors

or there was some understanding between the company and the investor, like you invest, we're going to advertise and we're going to make this thing bigger. And so what Pierce Hahn is really, harping on here is that it's crazy that this wasn't disclosed. And so my brain goes to, of course, like what would someone perhaps suing Steve Balmer in civil court over a lack of disclosure around the Kauai Leonard's side deal? Now think upon realizing, wait a minute, there was another side deal that's already been admitted to.

What an interesting decision by Bomber's lawyers to disclose this in a victim impact statement while also in the middle of a lawsuit with other investors who would have liked to have known this material side agreement existed as it would likely have impacted their own investment. So Steve Balmer is doing something, and we don't know why, though we certainly can speculate, as he's sending this impact statement to Judge Wilson prior to sentencing, but the reality is that he's disclosing something that's very hurtful in another litigation that is currently ongoing. Yeah, if I were a plaintiff counsel in the civil case,

I'd be jumping up and down at this one. I do want to point out that I've been spending many, many, many hours of my own looking for any evidence of previous disclosure across the 3,000 pages of documents and more that I've gotten and otherwise. And so what I can tell you is that according to one set of emails with Sandberg and potential aspiration investors that he was pitching, this is of February 2023, there are attached financial documents at an Aspiration Cap Table that mention the Balmer investment,

but they do not disclose the put option. And see that on the screen here. It also was not anywhere among the list of disclosures in the December 2020 purchase agreement for Dennis Wong, Balmer's longtime friend and the loan Clippers co-owner, who notoriously became the only new outside investor into aspiration after wiring $1.99 million into the broke company nine days. before Aspiration paid Kauai Leonard, his months overdue $1.75 million. And while Team Balmer said, yes, it was insidious that Sandberg was using Mr. Balmer's investments

to attract additional similar investors, that is quote, Balmer also participated in a big press release about his investment in December 2021, which was also included in the SECS4 filings for Aspirations future public offering, the SPAC that we explained earlier. And the release names Balmer in the headline, celebrating this big $50 million investment, and says nothing about the put-right, while quoting Balmer, saying, Lou, the following. As fighting climate change continues to become front and center for more people and businesses, Aspirations technology, brand, and community of members make it one of the most significant new companies in the public markets.

And that SECS4 filing for Aspirations Future Public Offering, According to Pierce Hahn, the securities lawyer we've been talking to, that does turn out to be the most obvious place where this should have been disclosed. That's really the biggest one, right? Because that's the most public-facing, right? I mean, you can make the argument that in a short press release, you just have the big-name investor, how much he's investing, then fine. But the S-4 requires comprehensive affiliate and related party disclosures.

I mean, that's the main public-facing document. If you try control effing certain related party or affiliate transactions. Certain relationships and related party transactions. It should be there. So command effing inside of this section, I'm looking for the name of the investor or the name of his LLC and neither come up. That should have been disclosed there. That's the appropriate place it would have. At minimum.

Right. So some companies will over-disclose, but at a minute. minimum, there should have been in one line that there was an arrangement with XYZ investor. And you could go to the SEC and say, you know, sorry, we disclosed it, but we didn't disclose enough. That's a more common issue, right? Where you don't disclose enough. But the fact that there's no disclosure at all is pretty egregious, in my view. And so just to translate again, what we are reporting here is, in fact, yes, Steve Balmer,

duped in the end. I am not disputing the loss of the money. What I'm saying is that along the way, he also had this IOU guarantee with Joe that was hidden from the public, from the market, and from future victims of Joe Sandberg, which lands, according to the SEC and securities experts I've talked to, most problematically upon aspiration and Joe Sandberg,

specifically, the people who authored, who are responsible for the SEC filing that was missing this disclosure. And so the question then becomes, but what about Steve Balmer's personal legal obligations as disclosure is concerned? And that is a bit trickier. It's a little bit more tenuous, right?

But if he's going out advertising on behalf of the company saying, I invested $50 million, and you should too, without disclosing that his $50 million investment is guaranteed, that's misleading. And that's omitting a material fact. And so that would be adjudicated how? An investor later, would sue, and then it would go through the courts.

But at the SEC, when reviewing the S4 itself, when it got filed, and any other related disclosures and filings, because the SEC is constantly looking at, but they don't have the manpower to look at everything. But if for whatever reason there was a red flag or something wasn't adding up, they may be doing their own internal investigation, and then they refer to their enforcement division. And then that's the one that then prosecutes and brings charges for fraud. We did reach out to Steve Ballmer's attorneys for clarification, their office, and they did not respond.

But all of this does bring us to the next thing that I have been looking forward to reporting here today, after spending the last three weeks or so talking to that range of current and former aspiration employees and investors, as well as current and former federal employees, Lou Manzo, not among them, incidentally, until now. The thing I've been meaning to report is that Steve Ballmer's put-right option, the secret side deal slash refunds slash IOU brokered with Joe Sandberg has now been reported to the Securities and Exchange Commission whose investigation into Sandberg and aspiration

is still ongoing. And you may recall that Ballmer was previously interviewed by the SEC, but what is quite notable if you read the SEC's complaint against Sandberg, this one filed in August of 2025, is that they describe how Investor One purchased the $50 million in aspiration stock after September 2021 because the company looked, quote, incredibly well financially.

And they went to detail, David, House Sandberg, quote, touted aspiration successes and profitability in the corporate ESG sector to Investor One's chief investment officer in person and over the phone, making materially false and misleading statements to Investor 1 in the process. And if you continue to read that section devoted to Investor 1,

aka by all description, Steve Balmer, they don't mention, the SEC does not mention that Investor 1 got a put-right option either. Which raises an interesting question, Lou, and I'm wondering if you can guess what the question is.

Does the SEC know? Bingo. And when, in fact, if they did, when did they learn this? Were they informed? when they interviewed Steve Balmer as the victim. David, who is laughing. I just had a thought that you're going to be mentioned in a third filing

because it will be from a talking head Pulitzer Prize winning podcaster that it came to light that there was this situation. I have been very afraid that someone else, including ESPN, by the way, which got a leaked version of Balmer's victim letter, would also draw attention to this put-right, but it is left this band of misfits, it turns out, to have this discussion. Once in a while, you have to be reined in

because there is a story that can be told that this put-right option was not actually meant to materially mislead investors. It was meant as a way to further cover up a salary-capped circumvention, which would not be all that interesting to the SEC. It is critically important to understand which road Steve Balmer is going to choose to walk down because you can't have it both ways.

Either this put right was a material representation that was not disclosed or it was immaterial for SEC purposes, but material for salary caps or convention. To me, it is very binary and I look forward to Steve somehow teaching me why it is something in the middle. So the question of why, why would it be that Steve Bomber disclosed the secret put-right option side deal with Joe Sandberg for the first time in a half decade? Team Bomber would not comment on any of this to us, but it is worth remembering, as we discussed in our last episode, that the MBA's investigators at Wachtel Lipton did file a very interesting letter, David, on behalf of one, Mr. Joe Sandberg, ahead of sentencing. And, and, you know, the

That letter did say this. Mr. Samberg sat with us for two in-person interviews, produced documents, and through his counsel, provided additional information that was relevant to our investigation. In all our dealings with Mr. Samberg, both directly and through his counsel, he provided information that was consistent with our review of contemporaneous documents and other evidence. Mr. Sandberg's cooperation substantially assisted our investigation, including our ability to develop a more complete understanding of key events. And so I suppose it is possible, Lou, maybe that Sandberg provided information to Wachtell Lipton, the NBA investigators about the put right side deal, and Wachtell maybe even asked Team Balmer about it, or at the very least informed them that this was a thing that Joe Sandberg had been taught. talking about, thereby incentivizing Steve Balmer to get out ahead of any public mention of the put-right

at sentencing, perhaps, in L.A., where Joe got the 14 years, or at a law firm's report to NBA Commissioner Adam Silver that is expected eventually maybe this summer in order to claim self-protectively that Balmer himself had already disclosed this. And so this is not, in fact, some bombshell, I said it myself. But Wachtel's lead in Investigator did not respond to my request for comment about this. I think your theory is the most likely. You generally want to take the sting out. So you say, this isn't news.

I've disclosed this. It has been known in the public sphere. And so this is a nothing burger. That's the only explanation I can come up with for why this would be in a victim impact statement at this stage of the game. It's certainly not something that the judge would really care about. And it's just a gratuitous detail

that doesn't need to be in the letter. Well, there is another bit of texture I need to acknowledge from an earlier episode, actually. And you may turn your Missalette to part eight of this series published in February of this year. When we discussed something, David, that is, it turns out relevant here. We discussed a very important and very privileged email chain, which described the negotiations, some of them at least, on Balmer's original $50 million investment. which he had made through his, as always, tragically named LLC, his vehicle, Pol Pat,

not Pol Pot, Pol Pot, Pol Pat. And the chain included, David, you may recall, Joe Sandberg, Asperation's Corporate Outside Council, Balmer's Corporate Outside Council, and also his chief investment officer, the aforementioned Brant Vaughn. Because on September 6th, 2021, otherwise known as Labor Day,

Palmer's Council included the following note, as everyone was trying to speed close this investment into a company with spoiler alert, fraudulent financials. Let us know if you have any questions at all. We are also working on a separate put-right letter agreement regarding the proposed transfer of a certain amount of shares to Joe Samberg, as well as a related side letter to be entered into between POPAT and Aspiration, acknowledging such put-right. will share drafts of these documents as soon as they are available. And that, which we had never read on the show before,

is the only documentation, the only evidence of this thing that Balmer suddenly disclosed in his victim impact letter. But the more insane part, I would argue, is the fact that in March of 2023, let's not forget this other component to the excerpt that David read from the victim's letter, in March of 23, Steve Balmer proceeded to a, invest another $10 million. And by then, if you're not familiar, not only had the two aspiration whistleblowers

filed their complaint to the government to the DOJ, where one Lou Manzo was, it turns out, waiting to be eventually invited onto this podcast. In the disclosures that Balmer signed off on, on that investment, he was told in writing that KPMG had resigned as Asperation's independent auditor. The company was in default, and the SEC, Lou, they put it this way in that same complaint against Joe Sandberg that we read from earlier. On our about July 5, 2022, KPMG resigned as aspirations outside auditor, citing, among other factors, revenue transactions that had characteristics of fraud. Not the best investment, I would say, given that you're going in, David, as we previously reported,

as if the company was still going to go public via SPAC at that over $2 billion valuation. That is the price that Ballmer still bought in at $10 million for. Nothing about this was normal is my takeaway. If you get this letter from KPMG that not only, you know, there's different ways auditors can resign. They can resign quietly and walk away, or they can resign and say,

revenue transactions that had characteristics of fraud. There's no way a company's going public, even via SPAC, after KPMG says this. And so the idea that this could still be a viable investment is preposterous. And so the question I have for Lou Manzo at the end here, as the guy who launched the prosecution that has now culminated in a towering 14-year sentence for Joe Sandberg, is kind of a simple one? But I do want to read from the thing that David Sampson quoted earlier, which was the NBA's collective bargaining agreement, which says about violations of the NBA salary cap, that they may be

proven by direct or circumstantial evidence, including but not limited to evidence that a player contract or any item or provision thereof cannot rationally be explained. And so, Lou, I know the NBA is not federal court. But if we provided a prosecutor with all of the evidence that this series has amassed over 11 episodes now, when it comes to whether Steve Balmer circumvented the NBA salary cap for Kawhi Leonard in a secret side deal with Joe Sandberg and aspiration, do you have an alternate rational explanation? No. Play the music!

It's very hard to imagine a scenario where rational actors would take these roots. but for the sake of this outcome, and that would be salary caps or convention. In other words, David, I think there is a one-word summary, which I'd hope you could provide us at the end here, because the answer to my question is therefore guilty. But speaking of verdicts, before I let you go here, I do need to point out that ahead of game one of the NBA finals,

which of course the New York Knicks, won quite dramatically. NBA Commissioner Adam Silver held his traditional annual press conference, and there was a question that I did not know was going to be asked. And I want to credit Joe Varden of The Athletic for completely independently asking it because this is the exchange that happened between the reporter and the commissioner unedited. I wanted to ask you about aspiration and the investigation there, but I wanted to point out a couple things and have you react.

The questions are, is the investigation done? When might you release whatever decision you're going to make? But in this process, there's been a Pulitzer awarded for the reporting on it. And then also yesterday, the CEO was sentenced to like 14 years in prison. Do either of those things, from a perception standpoint, affect the decision that you ultimately have to make? So number one, Joe, as you know, the investigation has been conducted by a law firm independent of the MBA. I mean, yes, ultimately we're paying their bills, but they are doing the work independent of the league office. And my instruction to them is, you know, we can't be investigating forever, and at some point we have to wrap it up.

But at the same time, the most important thing is that we get it right. And I think that relates to the second part of your question in terms of perception. I certainly hear and read things all the time about the perception of what really happened or didn't happen here. And my only reaction is I think I wouldn't be doing my job if ultimately I issued a determination based on perception. Like my job is to follow the facts. And what essentially happens here is that a fact. report together with findings will be made by this independent firm that's presented to me. It's then ultimately my role to determine what the appropriate discipline, if any, should

be meted out based on their findings. So sort of, you know, two independent processes there, and that's what's happening right now. So I don't have a specific timeline on when they will be completed. I think it's clear they're far along. I think those reports are reading all the time. from people who are being interviewed by them, and I think they understand that you could keep going on and on,

but I think we're close to the point now where I think we need to wrap this up, because you also need finality. Their team has to understand, you know, what situation they're going to be operating under, and so do the other 29 teams. So that's where things currently stand. Pablo Torre finds out is produced by Walter Averoma,

Maxwell Carney, Ryan Cortez, Juan Galinda, Patrick Kim, Neely Lohman, Rob McCray, Matt Sullivan, Claire Taylor, and Chris Tuminello. Studio engineering by RG Systems, sound design by Andrew Bursick, Digital Strategy by Bailey Carlin and Andrew Northern, theme song, as always, by John Bravo. We'll talk to you next time.