By Brittany Harwood and Tirzah S. Lollar, of Vinson & Elkins LLP
On April 19, 2018, former professional cyclist Lance Armstrong announced that he and the government reached a $5 million agreement to settle long-running FCA claims alleging he defrauded the government by submitting false claims for millions of dollars in United States Postal Service (“Postal Service”) sponsorship payments while lying about his use of Performance Enhancing Drugs (“PEDs”). The $5 million was a small fraction of the nearly $100 million in treble damages the government had sought.
Armstrong, known for his record seven consecutive Tour de France wins, was stripped of his titles in 2012 by the United States Anti-Doping Agency (“USADA”) after the Agency concluded that there was “undeniable proof” that Armstrong not only used PEDs himself but was the “ringleader” of the widespread and systematic use of PEDs among Postal Service cycling team members. In addition to being stripped of his cycling victories, he was banned from any further participation in professional sports. This finding was later affirmed by the International Cycling Union. Originally, Armstrong vehemently denied allegations of doping, even going so far as to bring a libel suit against the Times of London and its source, a former team masseuse, for publishing accusations of doping activities. However, in 2013, he admitted to the use of PEDs during a televised interview with Oprah Winfrey.
The $5 million settlement resolves allegations against Lance Armstrong that were brought by Floyd Landis, one of his former Postal Service cycling teammates, who also admitted to using PEDs while on the team. Landis claimed that Armstrong, directly and through team managers and spokesmen, made numerous false statements to the government denying PED use in order to convince the Postal Service to renew its sponsorship of the cycling team in 2000 and later to increase the sponsorship amount due to Armstrong’s 1999 and 2000 results in the Tour de France. Landis also alleged that Armstrong took active steps to conceal his doping for the duration of the Postal Service sponsorship and beyond, including lying under oath about PED usage during a 2005 arbitration regarding his entitlement to a bonus for his 2004 Tour de France win.
Although the government independently investigated Armstrong for potential federal crimes connected to the doping scandal and declined to bring charges, it intervened in Landis’s qui tam case in 2013. Since that time, Armstrong combatted the FCA claims by arguing that the government could not prove it suffered any harm as a result of his misrepresentations, pointing to evidence that the Postal Service actually made $163.7 million as a result of the sponsorship. The case had been scheduled to go to trial in May of this year. As part of the settlement, Floyd Landis will receive $1.1 million for his role in bringing the claims against Armstrong forward.
