The Justice Department Joins Whistleblower Lawsuit Against Lance Armstrong

March 26, 2013

Last month, the Justice Department ended months of speculation by announcing that it would intervene in the whistleblower lawsuit brought against Lance Armstrong by his former teammate,  Floyd Landis.  Landis’s suit claims that Armstrong and his businesses defrauded the United States Postal Service, Armstrong’s long-time sponsor, by agreeing to abide by all anti-doping procedures for the Tour de France and other cycling races.  In reality, Landis claims, Armstrong and his business were overseeing a well-oiled doping scheme at the same time they were collecting millions from the federal government.

Accusations of doping are hardly news for Armstrong.  The seven-time Tour de France winner has been the target of doping allegations for years.  Landis is no stranger to performance-enhancing drug accusations, either—he was stripped of his 2006 Tour de France title after failing a drug test just weeks after the race.  Landis maintained his innocence until 2010, but then admitted that he had used banned substances and accused Armstrong masterminding a team-wide plot to surreptitiously take performance-enhancing drugs.  Armstrong remained adamant that he did not use any banned substances until he admitted doping in a January 2013 interview with Oprah Winfrey.

But long before Armstrong came clean, Landis filed his whistleblower lawsuit on behalf of the federal government.  Like other whistleblower lawsuits, Landis filed his whistleblower lawsuit using the False Claims Act.  The Act is a remnant of contractor fraud from the Civil War and allows private citizens to bring fraud claims on behalf of the government.  The federal government may intervene and litigate the case itself, but if the government decides not to get involved then the whistleblower may continue the case on the government’s behalf.  If either the government or the whistleblower wins the case, then the whistleblower receives a portion of the recovery as an award.

The government did not immediately intervene and left it to Landis and his lawyers to litigate the case.  But on January 14, 2013, the same day that Armstrong admitted doping to Winfrey, the head of the U.S Anti-Doping Agency urged Attorney General Eric Holder to intervene in support of Landis’s case.  A little over a month later, in February 2013, the Department of Justice ended speculation and announced that it would intervene.

As in other whistleblower cases, the DOJ’s interest was in protecting the government’s coffers against unscrupulous activity.  In remarks announcing the government’s intervention, Stuart F. Delery, Principal Deputy Assistant Attorney General for the Civil Division of the Department of Justice, stated that the DOJ got because of its “steadfast commitment to safeguarding federal funds and making sure that contractors live up to their promises.”  Another DOJ official, Ronald C. Machen, Jr., noted that Armstrong’s activities came at a time when the Postal Service is struggling to make ends meet, stating that “the U.S. Postal Service is simply not in a position to allow Lance Armstrong or any of the other defendants to walk away with the tens of millions of dollars they illegitimately procured.”

Machen’s words take on more meaning in a time when the Postal Service is seriously considering eliminating Saturday delivery, and highlight why whistleblower lawsuits play an important role in safeguarding the public’s money from private fraud.  Although the Armstrong case is more high-profile than most of the whistleblower lawsuits brought in the United States, the general story is still the same: whistleblower cases in any area—healthcare, securities, or other government contracts—help uncover unlawful schemes and keep people’s investments or tax dollars out the pocket of a fraudster.

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