The settlement by Armstrong's former agent Bill Stapleton and Barton Knaggs, a longtime friend and business partner, was signed on Wednesday by a U.S. District judge. According to USA Today, the agreement "was part of a deal with former cyclist Floyd Landis," who initiated the lawsuit.
"Suffice it say, the settlement was reasonable under all the circumstances,” Landis' attorney, Paul Scott, told USA Today. "It allows us to focus our efforts and attention now on the upcoming trial of the central responsible party in the case."
Stapleton, Knaggs and their company, Capital Sports & Entertainment, will pay $68,000 to the federal government and $90,000 to Scott's law firm. In late 2014, Stapleton and Knaggs had agreed with Landis to a $600,000 settlement, but the federal judge rejected it.
"My clients are pleased to be out of the case," said Marc Harris, an attorney in Los Angeles who represented Stapleton and Knaggs. "It has been a very long road for them. Even with several rulings in our favor that continually whittled down the case against them, the government withheld its consent to have them dismissed from the case. We are gratified that we have finally resolved the matter."
The U.S. Justice Department declined comment on the settlement.
The U.S government is suing Armstrong on behalf of the Postal Service. They allege that Armstrong violated his contract with the U.S Postal Service by using performance-enhancing drugs and blood transfusions during his hugely successful career.
The Justice Department claims the Postal Service would never have accepted the sponsorship if it had known about the doping. It says that Armstrong concealed the doping violations to ensure he and the team kept getting paid, causing false claims to be submitted. Stapleton and Knaggs owned Capital Sports & Entertainment and were accused by Landis of conspiring with Armstrong.
Armstrong, along with his former USPS team associates Johan Bruyneel, Dr. Luis del Moral, Pedro Celaya, trainer Jose Pepe Marti and Michele Ferrari, were charged with anti-doping violations by USADA in June 2012. Armstrong decided on August 23, 2012 that he would not take the USADA case to arbitration, thus tacitly accepting a lifetime ban from all sports falling under the World Anti-Doping Agency (WADA) code, plus the disqualification of all competitive results achieved since August 1, 1998.
Landis had also confessed to doping while on the same Postal Service team. They are now enemies and rivals in the case. As the official whistleblower, Landis stands to get up to 25% of the damages if the case succeeds. Under the False Claims Act, Armstrong could be forced to pay out triple the $32.3 million paid by the Postal Service to sponsor his team from 2000 to 2004.
Armstrong's attorneys have not disputed the doping but argue that the Postal Service didn't suffer damages from it and instead profited from the sponsorship return that Armstrong helped create while wearing the USPS jersey at the height of his success.
The case is set to go to trial in November unless a settlement is reached before hand.