source: http://www.grafwv.com/page/content.detail/id/293180/US-joins-fraud-lawsuit-against-Lance-Armstrong--.html?isap=1&nav=5081
WASHINGTON
(AP) — The Justice Department joined a lawsuit Friday against disgraced cyclist
Lance Armstrong that alleges the former seven-time Tour de France champion
concealed his use of performance-enhancing drugs and defrauded his longtime
sponsor, the U.S. Postal Service.
The lawsuit alleges that riders on the postal service-sponsored
team, including Armstrong, knowingly violated their postal service agreements
by regularly using banned substances and methods to enhance their performance.
"Lance Armstrong and his cycling team took more than $30
million from the U.S. Postal Service based on their contractual promise to play
fair and abide by the rules — including the rules against doping," said
U.S. Attorney Ronald Machen, whose office is handling the case. "The
Postal Service has now seen its sponsorship unfairly associated with what has
been described as 'the most sophisticated, professionalized and successful
doping program that sport has ever seen.'"
In recent weeks, settlement discussions had been under way
between the Justice Department and Armstrong's lawyers. A person familiar with
the negotiations said Friday the two sides are tens of millions of dollars
apart on how much Armstrong should pay to settle the case. The person spoke on condition
of anonymity because the source was not authorized to speak on the record about
the private talks.
From 1996 through 2004, the postal service sponsored a
professional cycling team run by Tailwind Sports Corp., and Armstrong was the
lead rider. From 1999 to 2004, he won six consecutive Tour de France titles.
The suit also said Johan Bruyneel, the team's manager, knew that team members
were using performance-enhancing substances and facilitated the practice.
The Justice Department notified the federal court that it is
joining the lawsuit against Armstrong, Bruyneel and Tailwind and will file its
formal complaint within 60 days.
In announcing it was joining the case, the Justice Department
emphasized Armstrong's concealment of his activities and said the cover-up went
back to at least 1998.
"The U.S. Postal Service Cycling Team was run as a
fraudulent enterprise and individuals both inside and outside of sport aided
and abetted this scheme and profited greatly," said Travis Tygart, CEO of
the U.S. Anti-Doping Agency. "USADA applauds today's action by the U.S.
Department of Justice which holds promise for returning the many millions of
federal dollars in ill-gotten gains generated by this fraud."
Last month, USADA lobbied Attorney General Eric Holder for the
Justice Department to join the lawsuit against Armstrong. It was USADA's
investigative report in October that led to Armstrong being stripped of his
medals.
An Armstrong lawyer, Robert Luskin, said negotiations with the
government failed because "we disagree about whether the postal service
was damaged."
"The postal service's own studies show that the service
benefited tremendously from its sponsorship — benefits totaling more than $100
million," said Luskin.
Luskin said that "Lance and his representatives worked
constructively over these last weeks with federal lawyers to resolve this case
fairly."
The suit the Justice Department is joining was filed under seal
in 2010 by former teammate Floyd Landis, who was stripped of his 2006 Tour de
France title for doping. Under the False Claims Act, private citizens can act
as whistle-blowers and sue to recover money they believe was obtained through
fraud against the federal government. These suits remain under seal until the
Justice Department decides whether it thinks there is enough merit in the case
to take it over. The private whistle-blower receives a percentage of any money
ultimately recovered.
In his 2010 complaint, which was made public Friday, Landis gave
a detailed account of what he alleged had been widespread use of
performance-enhancing drugs by Armstrong and assistance from Bruyneel and
others to carry out the drug use.
During the 2002 Tour de France, Landis and Armstrong lay on
opposite sides of a bed to receive re-infusions of a half-liter of blood each,
Landis' complaint said. During the banned procedure, Bruyneel sat in a chair
watching and commented on how well the two were going to do in a time trial the
following day, according to Landis.
In Spain, Landis went to Armstrong's apartment, where Landis met
Italian physician Michele Ferrari, who drew half a liter of blood and placed it
in a refrigerator. Armstrong then asked Landis to stay in the apartment to
check the temperature of the blood each day while Armstrong went away for a few
weeks to train.
In 2003, the withdrawal of two units of blood had left Landis in
need of EPO to stimulate the production of red blood cells. Landis went to
Armstrong's apartment, where Armstrong handed him a box of EPO, which Landis
then used intravenously for several weeks during training for the Vuelta, a
road race in Spain.
In 2004 for the Tour de France , Armstrong, Landis and seven
teammates took blood transfusions on the team bus on a ride from the finish of
one stage of the race to the hotel. To conduct the transfusions, the bus driver
pulled over to the side of a remote mountain road for an hour, feigning engine
trouble.
Armstrong was the subject of a two-year federal grand jury
investigation that the Justice Department dropped a year ago without an
indictment.
Throughout his career, Armstrong always denied drug use, but he
confessed to having done so in an interview last month.
In October, USADA released a report that included affidavits
from 11 of Armstrong's former teammates. These affidavits detailed how the teammates
were supplied with EPO — a banned hormone that increases oxygen-carrying red
blood cells to boost endurance, particularly in thin mountain air — by
Armstrong and saw him inject, and how they were pressured to dope and bullied
by Armstrong and Bruyneel. The cycling world's governing body then took away
from Armstrong the seven Tour de France titles he won from 1999 to 2005.
Armstrong and USADA officials talked on and off over a couple of
months about the terms under which the cyclist might sit down for a long
interview to tell all he knows about doping in cycling, but Armstrong finally
announced he would not cooperate.
A person familiar with discussions between Armstrong and USADA,
who spoke on condition of anonymity because the discussions were private, said
among the topics was how much protection USADA could provide Armstrong in the
whistle-blower case and against possible criminal action. The cyclist and his
attorneys were not satisfied with USADA's offer, the person said.
Commenting Wednesday on Armstrong's refusal to talk, Tygart said
that, "over the last few weeks he has led us to believe that he wanted to
come in and assist USADA but was worried of potential criminal and civil
liability if he did so."
If the Justice Department ends up taking the Landis
whistle-blower case all the way to trial, a key issue is likely to be whether
the U.S. Postal Service — the Armstrong team's sponsor — suffered financial
harm from the drug scandal.
The government must prove not only that the postal service was defrauded,
but that it was damaged somehow. (backslash)
Studies done for the postal service conclude the agency reaped
at least $139 million in worldwide brand exposure in four years — $35 million
to $40 million for sponsoring the Armstrong team in 2001; $38 million to $42
million in 2002; $31 million in 2003; and $34.6 million in 2004.
The government could counter that all of the recent controversy
tarnishes the whole sponsorship and has damaged the postal service.
But the USPS sponsorship ended long ago and relatively few
people reading stories about the current controversy are associating Armstrong
with the post office. Armstrong's last sponsor for his final two Tours de
France was Radio Shack, in 2009 and 2010.
The government has a potentially strong weapon on its side: An
argument could be made that until recent months there was an active, ongoing
conspiracy to cover up Armstrong's alleged fraud. If the case ever goes to
trial, that argument could persuade a judge to allow in a huge amount of
evidence on Armstrong's use of performance-enhancing drugs dating back to the
1990s — evidence that would be barred from the government's court case as too
old if there were no extended conspiracy.
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