The Wall Street Journal reported in late 2010 that Floyd Landis had filed a federal False Claims Act case against Lance Armstrong for defrauding the U.S. Postal Service which had sponsored Armstrong’s team for six of his seven Tour de France wins. Yesterday the New York Times reported that the whistleblower case, apparently filed against Armstrong and Tailwind Sports, LLC, the entity that owned the team he raced on, is still under seal and being reviewed by the government.
Armstrong’s counsel claims that a government study shows that the U.S. Postal Service received a return of $103.63 million on the $32.27 million in sponsorship monies that it invested in Armstrong’s team. Not surprisingly, Armstrong’s counsel’s argument apparently is some version of: with a return like that, where are the damages? However, despite the claimed “return” on the investment there is a viable False Claims Act case if Armstrong and/or Tailwind knowingly made a false statement or record which was material to a false claim. In other words, if in connection with securing government sponsorship monies Armstrong and/or Tailwind provided false information or statements to the government, that Armstrong and his teammates were complying with the rules of the sport and were not doping or taking performance enhancing drugs and if these statements were material to the USPS’s decision to provide some or all of the $32 million in sponsorship monies, then this may provide the basis for a viable action under the False Claims Act.
We will post additional information about the status of this whistleblower case as more information becomes available.