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Armstrong's confession could lead to $100 million whistleblower lawsuit

By:
Cycling News
Published:
January 15, 2013, 8:46 GMT,
Updated:
January 15, 2013, 9:10 GMT
Edition:
Second Edition Cycling News, Tuesday, January 15, 2013
Race:
Lance Armstrong Oprah Interview
Lance Armstrong and Floyd Landis on the US Postal team

Lance Armstrong and Floyd Landis on the US Postal team

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US Justice Department considering joining Landis suit

The United States Justice Department is considering joining a federal whistleblower lawsuit reportedly filed by Floyd Landis, according to the Wall Street Journal. The suit is aimed at recouping the sponsorship funds provided by the US Postal Service, which supported the team from 1996-2004, in light of the US Anti-Doping Agency's lifetime ban of Lance Armstrong for doping.

If the suit is successful, Landis could, under the Federal False Claims Act, personally claim up to 30% of the funds that the government wins.

The confession to doping that Lance Armstrong has reportedly made to Oprah Winfrey in a to-be-aired interview could contribute to the Justice Department's decision. The deadline for joining the suit is Thursday, January 17, the day the interview will be broadcast on the OWN network.

The qui tam suit would depend on proving that the defendants "misrepresented themselves in the contract with the US Postal Service", according to the WSJ report. After Armstrong’s first two Tour de France victories, the sponsorship contract detailed that any negative publicity as a result of the use of banned substances or violations of anti-doping clauses would constitute "an event of default", which would terminate the contract. It also provided for any other "relief" available under the law.

The US Postal Service contract in 2001 was renewed to the tune of $32 million, according to documents available in the US Anti-Doping Agency’s reasoned decision. The total settlement to the government could, by law, be two to three times that amount.

However, any damages would be dependent on how much the US Postal Service paid out in comparison to what it received in return.

Armstrong’s attorney Tim Herman told the NY Times in October that the sponsor got a return on investment of three times the contract’s value.

"You have an annual return on investment of 320 percent," Herman said. "I hit my knees every night hoping someone defrauds me like that."

All of the documents of whistleblower suits are kept under seal, so any defendants are still unknown. The sponsorship contract with the US Postal Service was initially signed by Armstrong’s long-time financier Thom Weisel and Montgomery Sports, but later incarnations were owned by DFP Cycling LLC and Tailwind Sports.

 

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