UPDATE: U.S. Joins False Claims Act Suit Against Lance Armstrong

From 1996 to 2004, the United States Postal Service (“USPS”) sponsored the racing team owned by Tailwind Sports, LLC of which Lance Armstrong was the lead rider and Johan Bruyneel was the manager. Between 2001 and 2004, the USPS paid $31 million in sponsorship fees for the team.

The lawsuit, initially filed by whistleblower Floyd Landis under the qui tam provisions of the False Claims Act, alleges that Tailwind, Armstrong and Bruyneel submitted, or caused the submission of, false claims in connection with the USPS’s sponsorship of the cycling team. Specifically, the whistleblower alleged that members of the Tailwind-USPS team knowingly and repeatedly violated the sponsorship agreements which required that the team to abide by the rules of the sport’s governing bodies.

Cycling rules specifically prohibit the use of performance enhancing substances and methods, such as blood transfusions. After many years of denying allegations that he had engaged in the use of banned substances and methods, Armstrong recently admitted that he had, in fact, engaged in banned performance enhancing practices, starting in the mid-1990’s, and had encouraged others on his team to engage in similar conduct. The scandal has been described as the most sophisticated, professionalized and successful doping program the sport has ever seen.

The lawsuit is seeking to recoup the tens of millions of dollars in sponsorship fees the USPS paid to the Tailwind team. With a net loss of $15.9 billion for the 2012 fiscal year, the USPS stated it strongly supports the government’s intervention and pursuit of the monies paid to the team.

The U.S. government notified the U.S. District Court for the District of Columbia that it will file its formal complaint within 60 days. Under the qui tam provisions, the whistleblower may be entitled to a percentage of any recovery as his reward.