Back in February in this Milwaukee Employment Law Blog, we wrote about the U.S. Justice Department joining in the whistle-blower lawsuit against Lance Armstrong. This week, the Justice Department made it official and filed a formal complaint against the disgraced champion cyclist. The lawsuit also targets the team owners.
As we have previously discussed, this case is continuing to demonstrate the way in which qui tam whistle-blower cases function. Qui tam is a provision under the federal False Claims Act. Under this provision, private citizens–or whistle-blowers–can file a lawsuit on behalf of the government accusing a person or organization that receives government funding of defrauding the government. The government then has the option to take up the lawsuit itself, and if it does so and is successful the whistle-blower is entitled to a portion of the recovered damages.
This particular lawsuit was originally filed by Armstrong’s former teammate Floyd Landis. He accused Armstrong and others of defrauding the government by using performance-enhancing drugs while being sponsored by the U.S. Postal Service, which banned drug use in the sponsorship contract.
The USPS reportedly spent $40 million to sponsor the team, giving Armstrong alone $17 million. The government has announced that it will seek triple damages, or more than $150 million.
Armstrong’s attorney has argued that USPS did not suffer any real damage by sponsoring the team, and that in fact it benefited from it. Whether that is true, and what effect it may or may not have on the case remains to be seen.
The Justice Department’s complaint specifically accuses Armstrong and others of being “unjustly enriched” by defrauding the USPS.
Source: Business Insider, “Lance Armstrong Sued For Becoming ‘Unjustly Enriched’ By US Postal Service,” Agence France Presse, April 24, 2013