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US Justice Department file complaint in Armstrong whistleblower lawsuit

By:
Cycling News
Published:
April 24, 2013, 04:37,
Updated:
April 24, 2013, 05:47
Edition:
First Edition Cycling News, Wednesday, April 24, 2013
Ochowicz has also been a long-time employee of Thomas Weisel Partners,

Ochowicz has also been a long-time employee of Thomas Weisel Partners,

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US Postal benefits lead to Armstrong being "unjustly enriched"

The United States Justice Department has filed its complaint and met the Tuesday deadline to join the whistleblower case against Lance Armstrong and his former team director Johan Bruyneel, the US Postal team's management company Tailwind Sports, financier Tom Weisel, Armstrong's agent Bill Stapleton and former Tailwind president Barton Knaggs.

The complaint states the defendants received payments and other benefits from the United States Postal Service, the team's headline sponsor, in circumstances that were "unjust".

"Defendants were unjustly enriched to the extent of the payments and other benefits they received from the USPS, either directly or indirectly," read the in The Associated Press.

Armstrong was stripped of his seven Tour de France titles in the wake of the United States Anti-Doping Agency's Reasoned Decision document and later confessed to using banned methods to achieve his Tour victories. The whistleblower case was reportedly filed by former teammate Floyd Landis that alleges Armstrong defrauded the US government - USPS - by engaging in doping practices. The use of doping substances was in contrary to the contract agreement outlined between Tailwind and USPS.

Armstrong's people were quick to squash the complaint with attorney Elliot Peters suggesting the US Postal Service benefited greatly during Armstrong's Tour reign from 1999-2004 - the year's the government department sponsored the team. Peters called the complaint "opportunistic, and insincere" before seeking to dismantle their oppositions case.

"The U.S. Postal Service benefited tremendously from its sponsorship of the cycling team. Its own studies repeatedly and conclusively prove this. The USPS was never the victim of fraud. Lance Armstrong rode his heart out for the USPS team, and gave the brand tremendous exposure during the sponsorship years," said Peters.

The case was issued in 2010 but was only recently bolstered by the admissions of Armstrong and his former US Postal teammates. The case could be worth up to US$100 million after the Federal Department stated they would seek three-times the amount of sponsorship dollars recorded during that period. The amount paid to the US Postal squad is reportedly in the area of $40 million while Armstrong himself allegedly received $17 million from 1998-2004.

RobbieCanuck More than 1 year ago
Lance's lawyer claims the DOJ's complaint is "opportunistic and insincere" That is rich!
Galmozzi More than 1 year ago
Like Armstrong, He likely had to look those two words up in the dictionary to check what they mean.
ceramiccyclist More than 1 year ago
Yeah, we heard that same type of argument before Lance confessed to the USADA charges. I'm wondering here though about the selectivity of the case - what about Trek, Giro, Oakley and Nike? They profited hugely in the same way and we all know that the Oakley rep, Sylvia Macalvaine (not sure of the spelling) was bullied into keeping her mouth shut. These sponsors all knew what LA was up to. They didn't care because they were making profits. They've all thrown Lance to the wolves now. I hope he whistleblows on the whole lot of them. This entire saga reveals much about Corporate America.
brian meahan More than 1 year ago
Those companies weren't reportedly part of the doping regime and were just monetary/equipment sponsors. Plus they all had anti-doping clauses in their contracts.
Matic Robic More than 1 year ago
Lance made Trek what they are today (they still make crappy bikes but hey, they are known worldwide). Oakley can now charge a pair of glasses for 3 times the amount they are actually worth. And Nike can sell their made for 0,5$ clothes in China for 50-100$. Giro has also gained worldwide reputation, but at least unlike the rest of the sponsors, they actually make some high quality stuff.
Joel Kleppinger More than 1 year ago
Nike and Oakley were doing that long before Lance
Peter Beckett More than 1 year ago
So does the USPS have to prove that they would be better off today if they had not sponsored the team, or if they had and the riders had not doped? Are they filing suit against all of the other riders who chose to dope while riding for USPS? Not defending butt munch Lance, just wondering...
Radegem More than 1 year ago
It is opportunistic and insincere. The US dropped its case last year -- no explanation was ever given. And now that the whole world is piling on, they too bravely wade back into the muddy waters.
Gast Hoffmann More than 1 year ago
Always the same in a money-ruled society: Investors want their 'misused' money back, but are not willing to pay back the profits they made with their investment.
mike73nz More than 1 year ago
What a complete waste of time and money, how much is this going to cost the US tax payers? And if the judge rules in their favour how is LA and co going to come up with $100 million? After all these years the money has probably been used up or hidden away so all that will happen is the US Govt will be lucky to get back a faction of the money before people go bankrupt. Knowing the legal profession, they are the only ones likely to come out of this with any money.
Tim O'Neill More than 1 year ago
Partially agree. There is principle at stake and not being a US citizen I don't mind the US government spending money setting a precedent. Heaven knows the UK government wastes time with frivolous prosecution all the time! And yes, of course Lance will declare bankruptcy ... with his assets all protected somehow ...
mike73nz More than 1 year ago
So what does that really acheive? USPS made loads out of the team and LA. Now they are wasting more money trying to get back some money which might be tied up in courts for years. I can't see any winner here. Time to move on.
Alpe73 More than 1 year ago
It achieves a 'grand tale', Mike. Doping protocols, fraud, etc are way down the list of what's important, here. Since the day a very troubled and desperate Landis decided to commit (cycling) murder/suicide, a drama was put in motion that was just too irresistible not to exploit. From the USADA to DOJ to The Times to CN Gossip Corner ... it's better than food.
bikerbruce More than 1 year ago
I always enjoy your comments. Some I don't understand, but still appreciate your wit. I also get a kick out of the guys who accuse you and eopfuel as being the same person. Either "you" are a brilliant writer, able to change personas completely, or you and eopfuel are as different as night and day...not even from the same country, not the same age, not the same disposition, not the same intellect. But you're right, it's all good entertainment (not as good as a good meal though:-)
Alpe73 More than 1 year ago
BikerBruce: I must say that I like the objectivity of your posts ... your knowledge as well, as you rode with some of these guys in your younger years?? Epofuel-Alpe73 theory has me bustin a gut. He's a good man, though and would love to have a pint or two with him, I think. But I'd rather not have this entertainment ... it approaches gluttony. Hopefully, this will not make it to court. A settlement that both sides can stomach would be best (if not liked) for all. If it does go to court, I must take sides and can only hope that Armstrong cleans their fek __ king clocks.
Daniel Banks More than 1 year ago
Let's move on when the lawsuit damages are confirmed in court, paid in full or paid partially with Lance Armstrong's accounts and assets all zeroed out. USPS has suffered irreparable brand tarnishment which exceeds any momentary positive publicity they once received.
Rae N. More than 1 year ago
USPS brand tarnished by the cycling team?? Hardly. However, incidents like today -- when my neighbor's tax refund check was delivered to me -- THAT tarnishes their reputation!
PeterMc More than 1 year ago
So it is Lance Armstrongs Cartel that has destroyed the income of the USPS, not Email? Nor Fed Ex? Toll? Ipec? or Skype? So the electronic era has had absolutely no impact on the profit of a business that has built its profit on personal and business correspondence via snail mail, the driop in profit is purely a result of a tema it sponsored beign caught cheating? Hmm sounds completley feasable
Terrence Martineau More than 1 year ago
A) Lance is worth $125 million dollars B) if Lance loses he's not the only defendant so he would not owe $100 mil C) The defendants in this case COULD sue the other members of the team for there salaries and bonuses for that time period and recover quite a bit of money that way.. maybe even USPS because they did receive benefit from the sponsorship that they, themselves have made an accounting of...
mike73nz More than 1 year ago
Perhaps landis will be sued by Tailwind for £100million then? Nice complete circle....
Terrence Martineau More than 1 year ago
He could well be.. for triple the entire portion of the fraud that Lance and Johan were not responsible for (I'm guessing there is a pretty big differnce between Landis' and Johan's pay grade vs Landis at the time though)... then Landis would have to go and sue the rest of the team for triple their portions... and around and around until everyone has paid their portion of the fraud...
Alpe73 More than 1 year ago
Jarndyce vs Jarndyce ...
Terrence Martineau More than 1 year ago
..so not $100mill.. just the portion that Lance and Johan are not responsible for... the court could also say, get lost we are not hearing you case, you're a criminal... get outa here.. which would be their prerogative to do as well..
bikerbruce More than 1 year ago
Mike, you're right, this will likely end as a monumental waste of our incomes. But hey, we've got plenty of money to spend, right? But there's no telling what's really behind it. Maybe it's intended as a distraction from real problems. Who knows? And why was the first case dropped inexplicably? Who's really behind the gov taking up this case after dropping one before? This case will be brought into an actual court of law...not USADA. There will be an actual impartial judge who will uphold the law. It will be gov lawyers against some heavy hitting lawyers hired by some guys with deep pockets. Remember OJ? And I agree, the lawyers are the only ones certain to profit. Even if the gov wins, will they take the money and give it straight to USPS?
red_flanders More than 1 year ago
It's illegal to defraud the government and they have a major interest in prosecuting those who do, especially for that kind of money. Why no venom against the guy who solicited and fraudulently obtained the money? I certainly want my government to pursue those who defraud us (the taxpayers), as it dis-incentivises those who would consider doing it in the future. Me, I'm angry at the criminals, not those who prosecute them. Just me.
Matic Robic More than 1 year ago
Red_flanders, US Postal has therefore made an illegal profit, so all the profits the government has made through team sponsorships should be returned. Giving the USPS own research they owe the people and their customers somewhere over 400 million dollars...
jojo1973 More than 1 year ago
Many people, organizations and companies made a lot of money during this time...it wasn't just Armstrong who made the money. The focus legally shouldn't be just on Armstrong but needs to look at the whole picture of ALL that benefited from from that era. ALL of them should be held accountable.
risiak More than 1 year ago
The French told us he was doping.We told the French they were Frogs.Now what are we?
Frenchie More than 1 year ago
Judging by the comments on this article, I would say that you deserve Heroes like Armstrong, Landis, Hamilton, Jonathan Vaughters, Thomas Danielson, Christian Vande Velde, David Zabriskie, George Hincapie. They are the products of the society they are living in.
TheCycleSeen More than 1 year ago
This whole thing is getting boring. Can I bring a whistle-blower suit against other members of the US Postal team who were also unjustly enriched via prize money and salary earned via cheating?
RidemanRide100 More than 1 year ago
Yes, I'd like to sue Hincapie sports also. No one seems to be talking about his profiting from the sport or his salary while at USPS or anyone else who was on the payroll. Is landis going to give his entire salary back? From what i understand he hasn't given much back from his fairness fund? I'm going to sue hincapie sports for misleading me all those years. Emotional pain and suffering. Oh, and Danielson profiting from his book? Jojo73 I totally agree with your statements above.
Terrence Martineau More than 1 year ago
No... A) you were not an employee of USPS... B) you have no inside 1st person knowledge of what went on C) the info is already public knowledge.. based on Lances other victims Landis (like other whistle blowers) took great risk in releasing this new, detailed, corroborated, 1st hand account of the misuse of tax payer money and that's who this legislation is written to protect and reward...
Strydz More than 1 year ago
Well said Terrence
bikerbruce More than 1 year ago
Terrence, from what I've read on this site, whistleblower suits require neither employment by the offender nor inside 1st hand knowledge; it merely requires a suit be filed claiming that someone has defrauded the us gov and then the us gov decides to pick up the suit themselves. Is that not correct?
Terrence Martineau More than 1 year ago
bikerbruce - the government need not be a party to action in a whistle blower law suite (in this case the chose to be)... the whistle blower is in fact suing on BEHALF of the government and for their efforts they are given a portion of any moneys they recover for the government... yes, anyone can theoretically sue.. but in reality and in this case in particular... only someone who is an insider with access to documents, 1st hand knowledge etc has the info necessary to bring such a lawsuit.. you're going look pretty silly on your court date when all you have to say is that you read some articles on line that said it was the case.. and it's usually only going to be insiders that have knowledge to this kind of info before anyone else.. so technically anyone can bring the lawsuit, but in the real world.. you're going to have to an insider...
bikerbruce More than 1 year ago
Gotcha. Makes sense. Thx.
Rae N. More than 1 year ago
Could you clarify what "risks" Landis took? His career was already finished. He had already trashed his own reputation by his actions during the arbitration. Seems that his biggest risk was when he tried to gain a spot on Bruyneel's team by threatening to talk. He had nothing left to lose, it was done for revenge, and I think it would be "unjust" if he were to profit from the lawsuit since he participated willingly and without remorse.
Terrence Martineau More than 1 year ago
Rae N. - a) Financial risks... LA had sued and won almost ever single person that had previously implicated him.. in fact if the UCI had had there way as they had done previously.. the USADA's case would have been wrestled away from them and buried.. this was only very narrowly averted.. there was also a group of senators who got together to try to prevent the USADAs case from going forward etc.. this almost didn't happen and if it hadn't unfolded like it did (thanks to the resolve of USADA) Landis, his children and his grand children would be paying Armstong after he sued... b) Risks to his reputation.. sure he had lied in the past but he was finally telling the truth.. he had come clean, but had been vilified in the press, in the court of public opinion, in the cycling community a liar as it related to his accusation against LA.. he was ostracized and alienated and no one in cycling would talk to him (at least in public) c) he would never work in cycling, the sport that he loved and had devoted his life to after that date.. because of the omerta, because of the UCI that fully support the omerta.. after he came out, participation in organized cycling after that date would be impossible..
bikerbruce More than 1 year ago
I see it very differently. Floyd was reported to be financially destitute, with a court ordered repayment of the FFF looming. He had nothing to lose financially...literally. If Lance spent money on a suit, he likely wouldn't have made money. And in the USA, one's descendants are not held liable for debt, merely for being related (maybe that was tongue in cheek). Floyd's reputation was/is so tarnished that it is difficult to imagine him getting a job in cycling or any firm whose reputation he could sully...regardless of implicating Lance or if he repays the FFF. He doesn't seem to love cycling, but loves himself and uses cycling to serve himself and his purposes. Floyd, who appears simple minded (eg the synthetic exogenous steroids came from beer I drank), merely decided if they wouldn't play, then he'd confess and take Lance down with him, knowing that Lance would take the negative attention off of Floyd. Then a shrewd lawyer realized there was money to be made through whistleblower, and here we are.
Terrence Martineau More than 1 year ago
bikerbruce - I call BS... Floyd WAS actually an active member of the Rock Racing professional cycling team at the time of his allegations.. I think the final straw was Rock Racing was given permission to race, then it was revoked.. Landis reached to Armstrong for him to pressure ToC and Armstrong told him bascially to get lost.. but Landis could have carried on quietly earning a wage in domestic cycling exactly like Mancebo and others implicated in Puerto that ride in North and South America series.. there was of course no way back to the European pro peleton for him, but he certainly was and could have continued riding as a domestic pro over here... it was in fact after the allegations that Landis was out of work entirely and became destitute.. so making alegation against Armstrong DID in fact impact him financially, employment wise, participation in cycling wise directly... I think you are entirely wrong.. i feel Landis did in fact love cycling... at the time a prerequisite for participating at the highest level of cycling required doping.. it's a simple, rationale.. albeit immoral decision and most in cycling at the time made the same exact decision.. And I think you are also wrong about Landis' intelligence.. I think he's smarter than you or Armstrong think/thought he is.. and has much greater resolve.. i think by the way this has shaken out.. Armstrong has shown himself, in the end to be the dumb one.. driven by ego rather than sense.. the one thing I do agree with you on is on Landis' motivation... for sure this is Landis giving Armstrong the biggest F U he could come up with.. the same F U that Armstrong gave him...
Terrence Martineau More than 1 year ago
@bikerbruce.. go to YouTube and type in "Lance Armstrong reacts to Floyd Landis allegations"... Landis' allegations came out on eve of ToC when Rock Racing (who Landis was a member of) was disinvited to the race... www.youtube.com/watch?v=Kz6CbRrr2e0
bikerbruce More than 1 year ago
You believe that racing with Rock Racing was a viable source of future income? You believe that Floyd would have been hired by a domestic team and paid well enough to earn a good, long term living? Do you believe that Floyd would have been hired in the industry, even at a local shop? You believe that desire to race at the highest level, making the maximum income, and doping to do so, indicates a love for the sport itself? And is Floyd someone you would follow? Be employed by? Employ? Take advice from?
RidemanRide100 More than 1 year ago
Terrence, I understand the whistleblower suit. But how do you feel about Hincapie and the others not being held to the same standards. They were doping right? They benefitted from the salary they were paid and misled the USPS? So shouldn't Floyd and the DOJ go after the millions Hincapie and others made/makes/will make? Thoughts? I don't mean any cynicism at all. Thanks.
Terrence Martineau More than 1 year ago
but you don't seem to understand that in cases with many possible defendants.. the law allows me to sue all, some or just one of the parties that I believe have wronged me for the entire sum of money I think I am due... I don't have to go after each individually who may or may not have been involved... if they lose their case.. Lance and Johan would be entirely within their rights to turn around and sue Hincapie, Tyler, Landis and the others who were also involved in the fraud for the portion of money they feel they were 'unjustly enriched' with... that's how it work..
Terrence Martineau More than 1 year ago
..some judges don't like criminals coming into their court rooms to settle illegal endeavors so the judge might also dismiss the case and send them packing.. but their remedy is to sue the rest of the team for their portion of the fraud..
Alpe73 More than 1 year ago
TM: 1. What is degree of insight/expertise in this area? (Not doubting or challenging, simply 'asking'). 2. If you do have a high degree of insight/expertise, do you think this case will proceed to court? Do you think that Lance's team was waiting until yesterday to see the Feds case ... and if strong will be trying to cut a deal that would satisfy the feds? They were expecting around twice what Lance initially offered?
Terrence Martineau More than 1 year ago
I'm a very interested an inquisitive layman...
Liam Somers More than 1 year ago
How exactly did USPS suffer in this? What exactly are their damages? They got tremendous PR, which is what they purchased with their sponsorship dollars. I fail to see how they are at all an aggrieved party here. This is simply a case of piling on for the sake of piling on. It does nothing to "set a precedent", nor is in any way indicative of the US Gov't wanting to send a message to dopers, else why would only LA be targeted? Frivolous at best.
Strydz More than 1 year ago
This doesn't send a message to dopers? If it is shown that they will be caught and chased even in retirement then I say this is good thing
Liam Somers More than 1 year ago
They are all still doping, you know that...right?
wrinklyvet More than 1 year ago
Every last one of them?
mike73nz More than 1 year ago
And you know this how? Another riduculous statement with no fact. Team Sky are not doping so not "all" are doping for a start. However, if you can show us your proof then I will be interested to have a read.
Terrence Martineau More than 1 year ago
how do you know Team Sky is not doping... "Another riduculous statement with no fact." ... "However, if you can show us your proof then I will be interested to have a read."
Liam Somers More than 1 year ago
I suppose you are right, no way Froome, or Wiggo is taking anything. They just naturally destroy the field.
runninboy More than 1 year ago
as they did not "ALL" dope before, it is highly unlikey that they all do now. If anything it would discourage doping not increase it. So common sense tells us that even without proof the statement is most likely false.
PeterMc More than 1 year ago
Sorry the message I get out of this whole debacle is "If you dope make sure you can blame someone else when you get caught if you are an american." Also don't be the team leader, just be a domestic, do a creative writting course whilst you are riding and kkep notes. You will then be better off.
georgeeparker More than 1 year ago
USPS got tremendous PR from Armstrong's 7 TDF wins??? Last time I looked, there wasn't a single US post office in the whole of France. I never understood what value USPS got for the millions it spent on a sport that took place mostly outside the US... Did it make you buy more stamps?
brian meahan More than 1 year ago
The USPS is an international shipping company.
mike73nz More than 1 year ago
Are you sure your not confusing them with UPS? Two different companies I gather. USPS is a domestic US postal firm and UPS is a world wide courier.
bikerbruce More than 1 year ago
Yes Mike, USPS ships and mails internationally. That's why they sponsored a team in a primarily European sport...to advertise their international capabilities. They did studies and reported that they profited significantly from the sponsorship.
wiaruz More than 1 year ago
But it only ships FROM the US. Why advertise in Europe? The USPS is a government agency. It doesn't have offices in Europe offering shipping services from other countries. Maybe the team's success encouraged Americans to use USPS rather than FedEx, DHL or UPS?
runninboy More than 1 year ago
I never saw a US post office the whole time i lived overseas. While you can ship TO europe with USPS, that would make the value of sponsorship in Europe pretty limited. And those studies were by the USPS, you think they might have been a tad biased? Some of those numbers that i read were also for standard advertising of viewers domestically. When the greatest audience is unable to use the product it severley limits it's real value. Of course you might be contending that US viewers had no knowledge of the USPS, which is understandable. As Lance had to raise "awareness" because no one had any idea what cancer was or did before 1999.So it stands to reason most americans probably have no idea what that little box is in front of their house that gets filled up 6 days a week.
wiaruz More than 1 year ago
Always wondered the same thing
Liam Somers More than 1 year ago
USPS conducted their own internal review and it was found that the PR value of sponsoring the race team was estimated at $103 million dollars. That is from USPS reporting. So, they got a bargain actually.
Jezzygee More than 1 year ago
So the use should then pay someone themselves back for the money they obtained by a doping advertising campaign. How about they give that $103mil to a charity like live strong or cancer research. And all those that bye landis's book supports his profiting from doping same goes for Hamilton they should all be stripped from all previously and future profits because it will still come from their doping past
Strydz More than 1 year ago
I want what Elliot Peters is on
Alpe73 More than 1 year ago
"VIP breakfast with Floyd Landis - Sunday, June 2 ... only $75.00"
mike73nz More than 1 year ago
Isn't there a law which says that you can't benefit from a crime?
runninboy More than 1 year ago
breakfast? Sheesh that is alot of money, i am dying to see the menu "Dr Ferrari's famous Orange Juice"
Alpe73 More than 1 year ago
Oy ... Floyd and a FFF knish .... what could be better?
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doping
Tour de France