Feb. 22 (Bloomberg) -- The U.S. will join a lawsuit against Lance Armstrong that accuses the former champion cyclist of defrauding the government by using banned drugs while riding for the U.S. Postal Service, according to his lawyer.
The lawsuit, brought by former teammate Floyd Landis under the False Claims Act, remains under seal. Landis alleges that Armstrong defrauded the U.S. government based on his years of denying use of performance-enhancing substances, according to a person familiar with the matter, who asked not to be identified because the government hasn’t made its plans public yet.
“Lance and his representatives worked constructively over these last weeks with federal lawyers to resolve this case fairly, but those talks failed because we disagree about whether the Postal Service was damaged,” Armstrong’s lawyer, Robert Luskin of Patton Boggs LLP in Washington, said in a statement. “The Postal Service’s own studies show that the Service benefited tremendously from its sponsorship -- benefits totaling more than $100 million.”
The U.S. Postal Service paid about $40 million under its contract with Tailwind Sports LLC, which owned the team Armstrong rode with, from 1996 to 2004. Armstrong was the team’s lead rider from 1999 to 2004, according to court papers.
“Typically when the government joins the case it is resolved in a way that results in a recovery for the government,” John Phillips of Phillips & Cohen LLP in Washington, who has litigated whistle-blower cases since 1986, said in an interview.
He said the government only joins about 25 percent of cases filed under the False Claims Act.
The Justice Department recovered a record $3.3 billion in suits filed by whistleblowers in the 2012 fiscal year, the department said in December. When the government chooses to intervene and wins a False Claims case, the whistleblower can receive from 15 percent to 25 percent of the recovery. Charles Miller, spokesman for the Justice Department, declined to comment.
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 last month that he used a “cocktail” of testosterone, erythropoietin and blood transfusions throughout his career.
A compilation of the 41-year-old American cyclist’s earnings by Bloomberg News, using public documents, interviews, court testimony and marketers’ comments, showed part of Armstrong’s business ventures and profit centers. Armstrong made more than $218 million during a career he told Winfrey was “one big lie.”
Armstrong also faces a lawsuit seeking the return of $12 million in prize money a promoter paid the cyclist for three of those championships.
SCA Promotions Inc. paid Armstrong the bonuses after he won the 2002, 2003 and 2004 bicycle races, believing his representations that he had won each contest fairly, according to a complaint filed Feb. 7 in Texas state court in Dallas. SCA is suing to get the money back. Armstrong had previously denied doping allegations under oath, according to SCA’s complaint.