Lance Armstrong, a “household name” in the U.S. and abroad, has been in the news quite a bit lately and most of it was bad. The U.S. Department of Justice has joined a whistleblower lawsuit against the former cyclist. The lawsuit was filed by Floyd Landis, a former Armstrong teammate, who was stripped of his 2006 Tour de France win for doping. Landis alleged that for years he personally observed Armstrong take performance enhancing drugs (PEDs) on various occasions.
Armstrong, who won seven Tour de France victories, faced allegations of PED use going back to as late as 1999 and repeatedly denied such reports. In fact, he even went so far as to sue some of his accusers for making what he alleged were false statements. But in January 2013, during a televised interview with Oprah Wynfrey, the former cycling champion recanted his previous denials. During the interview, Armstrong admitted to using banned PED substances throughout his career which began in the mid-1990s.
In the lawsuit – filed under the federal False Claims Act – Landis claims that Armstrong and other Defendants knowingly made false claims to the United States Postal Service (USPS) by regularly using banned substances to enhance the team’s performance, in violation of USPS sponsorship agreements. The False Claims Act prohibits people or corporations from making false statements to the government in an effort to obtain government funds. The lawsuit alleges that the Post Office is a quasi-government agency. Therefore, according to the complaint, Armstrong and his co-Defendants are liable for civil damages for violating the USPS sponsorship agreements by lying about using PEDs in order to obtain government funding for his racing team.
If Armstrong is found guilty, he may be forced to pay the government millions of dollars. The False Claims Act permits the recovery of three times the government’s actual damages, plus civil penalties ranging from $5,500 to $11,000 for each false claim that was submitted to the government. In addition, the Act allows the whistleblower to recover a percentage of any recovery that the government ultimately obtains. In this case, Landis could recover several millions of dollars. The USPS paid sponsorship fees to Armstrong totaling $31 million between 2001 and 2004 alone.
The False Claims Act dates back to the Civil War, and has been used successfully in recent years to combat government fraud and to recover taxpayer dollars from wrongdoers. In its current form, the federal Act has also served as a model for many state whistleblower statutes that allow a whistleblower to recover a percentage of any funds obtained under fraudulent methods from that state. In June 2011, the Congressional Budget Office estimated that the DOJ will recover between $3 billion to $4 billion annually in civil fraud judgments over the next ten years.
In a statement announcing the government’s participation in Landis’s lawsuit, Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice said that the decision to join the lawsuit, “demonstrates the Department of Justice’s steadfast commitment to safeguarding federal funds and making sure that contractors live up to their promises.” Lawyers in our firm routinely handle litigation under the False Claims Act to recover damages on behalf of the government and whistleblowers. For more information on this subject, contact Lance Gould, Larry Golston, Archie Grubb, or Andrew Brashier in our Consumer Fraud section at 800-898-2034 or visit our website at www.beasleyallen.com. You can also reach them by email at Lance.Gould@Beasleyallen.com, Larry.Golston@Beasleyallen.com, Archie.Grubb@Beasleyallen.com, or Andrew.Brashier@Beasleyallen.com.
Source: www.npr.org and www.justicenewsflash.com
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