Judge Rejects Lance Armstrong’s Bid to Dismiss Whistleblower Lawsuit

July 9, 2014
10:35 am

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Judge Rejects Lance Armstrong’s Bid to Dismiss Whistleblower Lawsuit

07/09/2014 (press release: ReportGovFraudNow) // http://www.reportgovfraudnow.com/

A federal judge has rejected Lance Armstrong’s bid to dismiss a whistleblower lawsuit seeking to recover more than $100 million from the disgraced cyclist and his former team. As reported by Reuters on June 19, Armstrong must now face claims that he, team manager Johan Bruyneel, and team owner Tailwind Sports LLC defrauded the U.S. Postal Service by accepting millions of dollars in sponsorship fees while improperly using banned, performance-enhancing drugs.

In his ruling, U.S. District Judge Robert Wilkins said that the whistleblower suit — brought by Armstrong’s former teammate Floyd Landis and joined by the government — was “rife with allegations that Armstrong had knowledge of the doping, and that he made false statements to conceal the doping.”

Indeed, until his January 2013 admission of using — and lying about using — banned substances, Armstrong’s denials were both public and prolific. In 2005, the 7-time Tour de France winner told TV talk show host Larry King “I have never doped, I can say it again, but I have said it for seven years — it doesn’t help.” In an interview with the Associated Press in 2009, he commented that “at the end of the day, I have nothing to hide.” And as recently as 2012, in response to doping charges brought against him by the U.S. Anti-Doping Agency, Armstrong remarked: “I have never doped.”

Armstrong was stripped of his seven Tour de France titles in 2012 and banned from cycling for life by the U.S. Anti-Doping Agency.

Yet only after Landis’s whistleblower suit — detailing inside information on how the cyclist and his team allegedly used banned substances in violation of its agreement with the Postal Service — gained traction, with the government signaling that it would join it, did Armstrong finally acknowledge that he had, in fact, been doping.

“This is a great example of the whistleblower’s ability to get at the truth,” says Jeffrey F. Keller, a partner at the labor and employment law firm Keller Grover, and a veteran whistleblower lawyer. “Here is a case where a celebrated sports icon made one denial after another, to commissions, to journalists — live and on camera. But when inside information comes to light, so, too, does the truth. Only when the whistleblower case was about to be unsealed, did Armstrong come clean. Whistleblowers expose fraud and other misconduct that we might never otherwise see, because they have an insider’s view on what is really going on.”

Landis had brought his lawsuit under the federal False Claims Act, a statute that enables whistleblowers to allege fraud against the government — and share in any recovery the government ultimately obtains. While the False Claims Act dates back to the Civil War era, modifications in the mid-1980s dramatically increased its ability to recover improperly paid government funds. In recent years, whistleblower suits have been particularly effective in identifying — and rooting out — fraud in Medicare and Medicaid, pharmaceuticals, financial services, and the defense industry.

According to court papers submitted by Amstrong’s attorneys, the government is seeking to recoup more than $105 million from Armstrong, Tailwind, and former team manager Johan Bruyneel. While the Postal Service paid the defendants some $40 million during its decade-long sponsorship, the larger sum reflects triple damages allowed under the False Claims Act. The law also directs that Landis, as the whistleblower, is entitled to receive a percentage of any amount the government is ultimately awarded.

“Over the years, whistleblowers filing suit under the False Claims Act have made a real dent in fraud,” says Keller, whose firm has offices in Los Angeles and the San Francisco Bay Area. “These cases usually don’t get attention outside legal circles. But with this case, we are seeing that change. The Armstrong lawsuit is a high profile example of a potent law that lets us get to the truth — so we can home in on fraud, and beat it back.”