Late last month after Lance Armstrong admitted to the public that he used performance-enhancing drugs during his cycling career, we discussed whether that confession would affect a pending whistle-blower lawsuit against the athlete. The U.S. Justice Department has now decided to join that lawsuit, and more than $90 million may be at stake.
As many Wisconsin residents may remember, back in 2010 one of Armstrong’s former teammates filed the lawsuit under the qui tam provision of the False Claims Act. The False Claims Act allows citizens to blow the whistle on individuals or companies that may be defrauding the government.
This whistle-blower lawsuit accused Armstrong and others involved with his cycling team of breaching the team’s U.S. Postal Service sponsorship contract, which specifically prohibited cyclists from using performance-enhancing drugs.
The USPS paid more than $30 million to sponsor the team, and it has now been revealed that Armstrong and other cyclists were using the banned drugs.
The False Claims act allows the government to recover as much as triple damages, which means more than $90 million could potentially be recovered in this case. Whistle-blowers are generally entitled to a piece of the recovery as well, typically up to 25 percent.
As we mentioned in our earlier post regarding this lawsuit, if the government had chosen not to become involved, the whistle-blower could have proceeded with the case on his own but it may have been a more difficult road.
It has been suggested that the government’s biggest challenge in this case will be proving that the USPS suffered damages as a result of the contract violation. Armstrong’s attorneys have already suggested that the postal service actually benefitted from the fraud.
Source: Wisconsin Rapids Tribune, “Feds join civil fraud case against Lance Armstrong,” Brent Schrotenboer and Kevin Johnson, Feb. 22, 2013
- More information about the False Claims Act and filing whistle-blower complaints is available on our law firm’s Qui Tam Whistle-Blower page.