The government
joined a civil suit against Armstrong, stripped of his seven Tour de France
titles and banned for life from cycling in 2012 after accusations he had cheated
for years. In January, he said the accusations were true in an interview with
television host Oprah Winfrey.
A battle with the US government over civil
fraud charges threatens to sap what remains of the once-revered athlete's
reputation, and hurt his wallet.
Armstrong and his team-mates from
Tailwind Sports wore the logo of the US Postal Service during their
record-breaking wins.
"This lawsuit is designed to help the Postal
Service recoup the tens of millions of dollars it paid out to the Tailwind
cycling team based on years of broken promises," Ronald Machen, the US attorney
for Washington, DC, said in a statement.
The sponsorship money totalled
more than $30 million (19.7 million pounds), the government
said.
Armstrong plans to contest the suit because the Postal Service was
not actually damaged, his lawyer, Robert Luskin, said.
"The Postal
Service's own studies show that the service benefited tremendously from its
sponsorship - benefits totalling more than $100 million," the lawyer said in a
statement.
Prosecutors have said they do not expect to charge him with a
crime.
Former Armstrong teammate Floyd Landis filed a sealed
whistleblower suit against Armstrong in 2010. The decision by the government to
join the suit triggered its unsealing.
"I had come to a point in my life
where I decided that I had to tell the truth for the sake of my conscience,"
Landis, who also admitted to cheating, said in a statement on Friday released by
his lawyer.
WHISTLEBLOWER LAW
Armstrong faces other suits arising
out of his admission of cheating. This month, marketing firm SCA Promotions Inc
alleged in a Texas state court that the cyclist defrauded it of $12.1 million in
bonuses plus interest.
In January, two California men sued Armstrong and
his book publishers, claiming that his memoirs were filled with lies but were
billed as non-fiction.
The US government is suing under the False Claims
Act, an 1863 law that encourages private individuals to file suit when they have
evidence of fraud involving government money.
When the government
believes a suit has merit, it may take over the litigation. The individuals, or
whistleblowers, get a portion of the proceeds if the case is
successful.
The government joins 20 to 25 percent of all False Claims Act
suits filed, and the government almost always wins the cases it joins, said John
Phillips, who represents whistleblowers at the Phillips & Cohen law
firm.
"That's a very good sign for the case: that the government after
its own investigation, after looking at all the facts and the law, has decided
to join the case," said Phillips, who is not involved in the Armstrong
case.
Since the law was revitalized in 1986, it has been used frequently
against military contractors, pharmaceutical companies and
hospitals.
PREPARED TO FIGHT
Armstrong is prepared to argue that
claims over most of the sponsorship money are time-barred, a source close to his
legal team said, speaking on condition of anonymity. The sponsorship agreement
expired in 2004, and there is a six-year statute of limitations on recovery
under a US anti-fraud law, the source said.
The source raised two other
arguments that could help Armstrong. First, the sponsorship contract did not
contain specific language or promises related to doping.
Second,
Armstrong was not in charge of Tailwind Sports, the racing team firm that signed
the contract with the Postal Service and that existed before Armstrong joined
it.
Luskin is among the most sought-after defence lawyers in Washington.
He represented former White House adviser Karl Rove in a case about the leak of
a CIA officer's name.
Statements from government lawyers appeared to
dismiss the idea that Armstrong could use the lack of specific contract language
as a defence.
Armstrong and his team "agreed to play by the rules and not
use performance enhancing drugs. We now know that the defendants failed to live
up to their agreement," said Postal Service General Counsel Mary Anne
Gibbons.
In the most recent fiscal year, the government reached $5
billion worth of settlements and court judgments under the False Claims Act - a
single-year record.
"If they intervene, that puts the force of the
government behind the suit," said Matthew Orwig, a former Justice Department
lawyer now at the Jones Day law firm. He is not involved in the Armstrong
case.
"There's the FBI, other investigative resources, Justice Department
lawyers - in effect, the richest client in the world," he said.
