January 25, 2013

Lance Armstrong’s Legal Woes Mount as Justice Department Considers Joining Fraud Case

By Jason Enzler

A False Claims Act complaint filed against Lance Armstrong by former teammate Floyd Landis has leaked, despite the fact that it was filed under seal and the Department of Justice has not publically decided whether it will intervene.  Although the DOJ was expected to make that decision last Thursday, there have been widespread reports that the decision would be postponed because DOJ officials are divided on the issue.  The DOJ has reportedly already rejected a $5 million offer by Armstrong to settle the whistleblower lawsuit.

Landis is no stranger to the world of performance enhancing drugs himself (he was stripped of a Tour de France championship for using PEDs).  In his complaint, he alleges that Armstong duped the U.S. Postal Service into sponsoring his cycling team – which was riding high on PEDs – at a cost to the U.S. Treasury of $30 million.  The lawsuit, filed more than 2 ½ years ago, has roped in others from Armstrongs’ inner ring: Johan Bruyneel, who managed Armstrong during all seven of his Tour de France victories, wealthy patron Thomas Weisel, close friend Barton Knaggs, and agent William Stapleton.  It is unclear whether any of these other defendants have engaged in settlement negotiations with the DOJ.

While this represents a significant threat to Armstrong and his co-defendants – liability upwards of $90 million plus attorneys fees – it is not even the latest in his legal woes.  Just three days ago, two individuals sued Armstrong for fraud and false advertising on behalf of a class of those who bought his memoir, “It’s Not About the Bike.”  Emma O’Reilly, Armstrong’s masseuse who he called an “alcoholic whore” and against whom he filed a defamation lawsuit for blowing the whistle on his PED usage back in 2004, is also considering whether to sue him.  It also has been reported that The Sunday Times will be seeking to recover the $1.5 million it lost in connection with Armstrong’s libel lawsuit against the newspaper.  No doubt others that Armstrong defrauded or attacked for reporting on his PED usage will be considering whether to join the legal scrum.

But all of this pales in comparison to the criminal charges Armstrong could face.  The Los Angeles U.S. Attorney dropped, without explanation, a criminal investigation of Armstrong last year.  Armstrong’s confession to Oprah Winfrey and the American public, as well as the U.S. Anti-Doping Agency’s extensive report from earlier this year, could support a reopening of that investigation or a new one by another authority.  As if that were not enough, investigators familiar with the case say that Armstrong did not even come clean in his interview with Oprah, lying about details such as when he stopped using PEDs.  The jury, or most likely juries in this case, are still out (in fact they have not even been selected yet) on where this will all lead for Armstrong and his cohorts, but one thing is sure: this ride is hardly over.

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