Armstrong and others facing potentially huge penalties as US Government joins Qui Tam Whistleblower case
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Friday, February 22, 2013

Armstrong and others facing potentially huge penalties as US Government joins Qui Tam Whistleblower case

by Shane Stokes at 3:26 PM EST   comments
Categories: Pro Cycling, Doping
 
Department of Justice to join suit started three years ago by Floyd Landis

Lance ArmstrongOne day after various media sources suggested that the US Department of Justice was looking increasingly unlikely to join the Qui Tam whistleblower suit lodged against Lance Armstrong and others by Floyd Landis, the DoJ has now reportedly decided to take up the case after all.

The Wall Street Journal has reported that the US government is expected to file papers today in a federal court in Washington, thus joining former US Postal Service rider Landis in his complaint against Armstrong, the former USPS team owner and San Francisco investment banker Thomas Weisel, Armstrong’s longtime agent, Bill Stapleton and others.

Landis’ filed his complaint under the False Claims Act in early 2010, claiming that widespread doping occurred on the team and that this violated contract agreements signed with the US Postal Service at the time.

If found guilty of defrauding the US government, Armstrong and the others could face a legal punishment three times the value of the original $30 million sponsorship arrangement that was paid out between 1999 and 2004.

The Department of Justice’s decision to join the suit reduces the percentage share that Landis would receive if the case is won, but at the same time increases the overall chances of success.

The US Anti Doping Agency CEO Travis Tygart wrote to U.S. attorney general Eric Holder last month, urging him to take the decision to join the case.

“USADA’s specific request here is that the Justice Department join in the reported pending civil action to bring to light and impose financial consequences on the non-sports individuals who owned and controlled the U.S. Postal Service team, which we now know was involved in a massive economic fraud on the United States Postal Service and other easily-identifiable individuals, companies, and the public,” he stated in that letter.

“USADA is willing to share with your office the information it has gathered in its investigation. We would also be happy to meet with you to discuss this request.”

He said that there was clear indications that laws had been broken. “Fraud and other crimes were committed. Illegal drugs were used and trafficked, both within and outside the United States; witnesses in both the USADA and federal investigations were intimidated; riders were coerced into using drugs to keep their places on the teams; an insurance company (SCA Promotions) was defrauded by false testimony under oath; and sponsors (including the U.S. Postal Service) paid tens of millions of dollars to the team based on representations that there was no doping, which turned out to be cold, calculated lies…

“Further, we suspect that the evidence of fraud assembled by the FDA and FBI, working with the U.S. Attorney’s Office for the Central District of California, exceeds the evidence of fraud which USADA has uncovered.”

According to the Wall Street Journal, Holder and top Justice Department officials met yesterday afternoon to weigh up the matter. The decision ultimately came down to Holder, but it is understood that there was a general agreement about joining the case.

Armstrong repeatedly denied doping for many years, and took legal action against some who claimed otherwise. He swore under oath that he never used banned products during his career. However that denial was dropped last month when he admitted to Oprah Winfrey that he had used a wide range of banned substances.

Mindful of the problems this admission could open up, his legal representatives have reportedly been trying to negotiate a settlement with Justice Department officials and Landis' lawyers. However one of his lawyers, Robert Luskin, has confirmed that these talks were unsuccessful.

"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,” he said, according to the NY Daily News. “The Postal's Services own studies show that the Service benefited tremendously from its sponsorship -- benefits totalling more than $100 million.”

Even if benefits are shown, though, these do not clear Armstrong and others of defrauding the government. It is understood that any possible benefits would instead be weighed up when determining what final penalties should be paid out.

Also see: US Dept of Justice officially confirms action against Armstrong and others, USADA applauds move

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