Consumer Fraud

Lance Armstrong wants $120-million whistleblower lawsuit dismissed

osha whistle Lance Armstrong wants $120 million whistleblower lawsuit dismissedDisgraced cyclist Lance Armstrong and his lawyers have asked a federal judge to throw out a $120-million lawsuit brought against him by a whistleblower who says the seven-time Tour de France champion defrauded the U.S. government by taking sponsorship money from the U.S. Postal Service (USPS) while he was doping.

Mr. Armstrong was finally stripped of his Tour de France titles last year, after years of denying accusations that he used performance-enhancing drugs to win the races. He admitted in January that he had used the drugs and lied about it. Mr. Armstrong subsequently lost his sponsorship deals and was banned from competitive cycling for life.

In 2010, Floyd Landis, one of Mr. Armstrong’s teammates, brought a whistleblower lawsuit against the Tour de France champion, accusing him of defrauding the U.S. government by taking sponsorship money from the U.S. Postal Service under the condition that there would be no use of performance-enhancing drugs.

Mr. Landis filed the lawsuit under the False Claims Act (FCA), which allows individuals to sue on behalf of the U.S. government when they witness acts of fraud, waste, mismanagement and other wrongdoing that harms taxpayer-funded government programs and entities. In return, whistleblowers who sue under the FCA will share a percentage of the recovery, usually about 20 percent.

However, Mr. Armstrong’s lawyers sharply criticized the whistleblower lawsuit, arguing that the U.S. Postal Service should have known that Mr. Armstrong was doping and lying about his use of the drugs. They say that U.S. Postal officials “did nothing” even though rumors of Mr. Armstrong’s doping were making front-page news, and that those officials were enjoying the perks that came along with the sponsorship, such as private-tent receptions on the Champs Elysees in Paris.

The U.S. Postal Service started sponsoring Mr. Armstrong in October 1995 and continued until the end of 2004.

The U.S. Department of Justice opted to join Mr. Landis’s suit in February, effectively taking it over. The U.S. can decide whether to join whistleblower lawsuits, but whistleblowers can still sue in cases where the U.S. refuses involvement.

The lawsuit against Mr. Armstrong names several others as defendants, including Bill Stapleton, Mr. Armstrong’s agent; Thomas Weisel, the owner of Mr. Armstrong’s team; and Johan Bruyneel, the team’s manager.

Mr. Armstrong and the other defendants could be found liable for triple the amount of the U.S. spondsorship if found guilty of fraud under the False Claims Act. The USPS invested about $40 million in Mr. Armstrong over its nearly decade-long relationship with him.


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