Lance Armstrong Accused of Defrauding U.S. in Complaint

April 24 (Bloomberg) -- Bloomberg's Sara Eisen reports that the U.S. government has filed a complaint against former champion cyclist Lance Armstrong, alleging he defrauded the U.S. by using banned substances during sponsorship of his team by the U.S. Postal Service. She speaks on Bloomberg Television's "Bloomberg Surveillance."

(Corrects list of defendants in second paragraph in story published April 24.)

Lance Armstrong, the former champion cyclist, defrauded the U.S. by using banned substances, the government said in a complaint filed under the False Claims Act that joins a lawsuit brought by his ex-teammate Floyd Landis.

The Justice Department, in the complaint filed yesterday in federal court in Washington, brought six counts of false claims, fraud and unjust enrichment against Armstrong, his team manager Johan Bruyneel and team owner Tailwind Sports Corp. An additional breach of contract claim was brought against Tailwind. Tailwind founder Thomas Weisel, one of several additional defendants in Landis’s suit, wasn’t named in the U.S. complaint.

The government, which told the court in February that it would join the Landis suit, alleges the U.S. paid about $40 million in false claims through the team’s contract with the U.S. Postal Service from 1998 through 2004. Tailwind used Postal Service sponsorship fees to pay Armstrong’s salary of $17.9 million during those years, according to the complaint. The U.S. is seeking triple damages.

“Throughout the term of the USPS’s sponsorship of the team, defendants made numerous false statements denying that the team had engaged in any prohibited practices,” the government alleges in the complaint.

Photographer: Ramin Talaie/Bloomberg

Lance Armstrong, founder and chairman of the Livestrong Foundation. A record seven-time Tour de France winner from 1999 to 2005, Armstrong was stripped of the titles by the U.S. Anti-Doping Agency in August. Close

Lance Armstrong, founder and chairman of the Livestrong Foundation. A record seven-time... Read More

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Photographer: Ramin Talaie/Bloomberg

Lance Armstrong, founder and chairman of the Livestrong Foundation. A record seven-time Tour de France winner from 1999 to 2005, Armstrong was stripped of the titles by the U.S. Anti-Doping Agency in August.

A record seven-time Tour de France winner from 1999 to 2005, Armstrong was stripped of the titles by the U.S. Anti- Doping Agency in August. The cyclist acknowledged in a television interview with Oprah Winfrey in January that he used a “cocktail” of testosterone, erythropoietin and blood transfusions throughout his career.

‘Insincere’ Complaint

“The DOJ’s complaint against Lance Armstrong is opportunistic, and insincere,” Armstrong’s lawyer, Elliot Peters, said in an e-mailed statement. “The USPS was never the victim of fraud. Lance Armstrong rode his heart out for the USPS team, and gave the brand tremendous exposure during the sponsorship years.”

Armstrong, 41, made at least $221 million since turning professional, according to a compilation of his earnings by Bloomberg News. He was the team’s lead rider from 1999 to 2004.

Landis, who could receive some of the award if the case is successful, in August admitted defrauding donors to his legal defense fund by falsely claiming that he hadn’t used performance-enhancing drugs during his professional cycling career. The admission was part of a deferred prosecution agreement filed in federal court in San Diego.

The case is U.S., ex rel. Floyd Landis v. Tailwind Sports Corp., 10-cv-00976, U.S. District Court, District of Columbia (Washington).

To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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