As Lance Armstrong readies for his big Oprah appearance, an important legal issue looms in the background, one that won't be smoothed over by any forced apologies. It's been revealed by several news organizations that Floyd Landis, a former teammate of Armstrong's and a former Tour de France winner, has filed a federal qui tam whistleblower lawsuit against Armstrong.
The whistleblower suit filed by Landis in 2010, claims that Armstrong violated the terms of the $30 million sponsorship deal he signed with the U.S. Postal Service. The violations occurred because Armstrong and others took drugs to enhance their performance, something specifically forbidden in the USPS contract.
Landis has launched the suit under the False Claims Act, a piece of legislation that allows whistleblowers to file suit against individuals and companies who defraud the government of money. In this case, Landis has sued Armstrong saying that he defrauded the USPS of $30 million that was paid to sponsor his racing team. The False Claims Act specifies that penalties can rise to three times damages, so Armstrong may be on the hook for up to $90 million.
Landis has an incentive to launch such a suit, given that the Act allows whistleblowers to receive a share of the amount ultimately recovered as a reward. The suit in question is what's known as a qui tam action, meaning that it has been filed "under seal." This means that those party to the suit, including Landis, cannot discuss the suit in public. The current privacy seal ends on Friday and if the government does not ask for an extension, it will have to decide then whether or not to join Landis' whistleblower suit.
If the Justice Department decides to join the case against Armstrong then it will proceed like any other case with the federal government taking the lead prosecuting the case. If not, Landis and his attorneys are allowed to pursue the case on their own. If that were to happen the money would still go to the government, but Landis could keep a larger share of the damages collected.
Many expect the Justice Department to pursue the case against Armstrong. The current public relations flurry has angered the public and many believe Armstrong should repay the money he took from the USPS now that he has publicly admitted to doping. How much money Landis could collect depends on whether the matter settles out of court and how much he contributed to the final result of the case. Whistleblowers are entitled to between 15 and 25% of the recovery if the government joins the case, and 30% if the government does not.
Sources:
The Whistleblower Lawsuit Against Lance Armstrong: What to Expect Next by Erika Kelton, published at Forbes.com on January 17, 2013.
EXCLUSIVE: Inside the Secret Whistleblower Case Against Lance Armstrong -- Former Teammate Floyd Landis' Lawsuit Nails Cycling Cheat by Teri Thompson, published at NYDailyNews.com on January 17, 2013.
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