# Armstrong lawsuit question



## Jwiffle (Mar 18, 2005)

So the feds (with Landis) are trying to sue Armstrong for $100 million. My question is if the USPS gave the money to the team, how is it they can go after just Armstrong for the entire amount? Shouldn't he be no more liable than the rest of the team? In which case, his share that he would potentially owe would only be a few million.


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## evs (Feb 18, 2004)

I was thinking that myself when I saw it. They were all complicit in the shenanigans.
Why isn't anyone else from the team being indicted?


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## spdntrxi (Jul 25, 2013)

honestly all those involved with LA..those that did extremely well for themselves during that run of TDF's and should not be looking for the money grab.


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## Gregory Taylor (Mar 29, 2002)

Lance is not the only defendant. 

Floyd sued everyone who had an ownership or management interest in the team, or potentially knew about the doping. 

Tailwind Sports

Montgomery Sports

Capital Sports and Entertainment

Thomas Weisel

Johan Bruyneel

Bill Stapleton

Barton Knaggs

Ross Investments

John Does 2 - 50 (ie potentially the riders on the team, and other staff)

....and Lance Armstrong.

As one who was an alleged direct participant in the fraud that induced the USPS to sign and maintain the sponsorship arrangement, Lance could be found "jointly and severally" liable for the whole amount. It is alleged that Lance got a 12% ownership interest in Tailwind in 2004, so he was an owner as well a rider. The Court most likely will allocate liability among the various defendants if it finds that the False Claims Act was violated.

As an aside; I would love to meet the attorney who advised Floyd to file this suit. What a great piece of strategic lawyering - he or she saw that things were falling apart for him in the aftermath of his own scandal, and threw this in over the transom as a sort of Hail Mary pass.


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## CliffordK (Jun 6, 2014)

Why is the USPS claiming that they are heading for bankruptcy, and giving away $100 million to support a bicycle racing team? Anybody going out to send more mail because of the USPS supporting bicycling?

If it is advertising, then haven't they already reaped the benefit from the advertising, and now are asking for their ad money back? 

I have no doubt that several Armstrong teammates also were aware of his doping, so one might consider it to be a whole team problem, but it is odd to come after a single individual. How much was Armstrong personally paid of USPS money? I saw online that his net worth is estimated at about $125 Million, so he apparently has the funds to cover the lawsuit, but is all that money from the USPS, or from other donors and sources too?


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## burgrat (Nov 18, 2005)

CliffordK said:


> Why is the USPS claiming that they are heading for bankruptcy, and giving away $100 million to support a bicycle racing team? Anybody going out to send more mail because of the USPS supporting bicycling?
> 
> If it is advertising, then haven't they already reaped the benefit from the advertising, and now are asking for their ad money back?
> 
> I have no doubt that several Armstrong teammates also were aware of his doping, so one might consider it to be a whole team problem, but it is odd to come after a single individual. How much was Armstrong personally paid of USPS money? I saw online that his net worth is estimated at about $125 Million, so he apparently has the funds to cover the lawsuit, but is all that money from the USPS, or from other donors and sources too?


I don't think the USPS gave $100 million to the team, I believe the amount is in the mid 30's but the penalty could be up to 3x's the amount of the the fraud, therefore ~$100m.

I never understood the purpose of the sponsorship. Even when Lance was "winning" multiple Tours, I think I saw only 1 ad with the team and there were no stamps or other promotions that I can remember. Wouldn't a normal business advertise the hell out of their success to capitalize on that exposure?


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## evs (Feb 18, 2004)

Floyd should end up retiring like a king. Does anyone know the cut that a whistle blower gets from settlements.


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## Gregory Taylor (Mar 29, 2002)

In cases where the Department of Justice has stepped in to take over a False Claims Act case filed by a private individual, the private citizen who files the original suit usually gets somewhere between 15 - 25 percent of any settlement or recovered damages. I can't remember if that is a percentage of actual damages, or whether it includes any enhanced amount. The statute also provides an award of the relator's attorneys' fees.


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## atpjunkie (Mar 23, 2002)

burgrat said:


> I don't think the USPS gave $100 million to the team, I believe the amount is in the mid 30's but the penalty could be up to 3x's the amount of the the fraud, therefore ~$100m.
> 
> I never understood the purpose of the sponsorship. Even when Lance was "winning" multiple Tours, I think I saw only 1 ad with the team and there were no stamps or other promotions that I can remember. Wouldn't a normal business advertise the hell out of their success to capitalize on that exposure?


they were getting exposure in Europe. They weren't using the Team for domestic marketing


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## jaggrin (Feb 18, 2011)

What I have never understood is how can Landis who also participated in the defrauding of the federal government by taking PED while on the team turn around and sue others for doing the same thing? I mean if six of us robbed a bank and split the cash then I turn around and sue the other five nobody would be giving me a cut of the money that gets recovered from those five. To me the only way the USPS was damaged is if they could prove that after Armstrong was found guilty of cheating everyone stopped using their services because they sponsored a team 10 years ago. This whole lawsuit is a farce. I do think Armstrong should lose his shirt in all the other legal action against him but this to me seems like another example of big government run amuck.


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## CliffordK (Jun 6, 2014)

atpjunkie said:


> they were getting exposure in Europe. They weren't using the Team for domestic marketing


Maybe I'm missing something, but what do Americans benefit from the USPS advertising in Europe? Are the Europeans going to be sending more US mail, or arguing for or against Saturday delivery?


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## brianmcg (Oct 12, 2002)

atpjunkie said:


> they were getting exposure in Europe. They weren't using the Team for domestic marketing


Yes, because NOBODY heard of the USPS team that Lance was on in the USA.

From what I remember reading at the time when the question was brought up, the USPS would have had to spend hundreds of millions of dollars to get the same exposure they got from sponsoring the team. In effect they got a pretty good deal. I'm sure this will come up again soon.


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## Local Hero (Jul 8, 2010)

jaggrin said:


> What I have never understood is how can Landis who also participated in the defrauding of the federal government by taking PED while on the team turn around and sue others for doing the same thing? I mean if six of us robbed a bank and split the cash then I turn around and sue the other five nobody would be giving me a cut of the money that gets recovered from those five. To me the only way the USPS was damaged is if they could prove that after Armstrong was found guilty of cheating everyone stopped using their services because they sponsored a team 10 years ago. This whole lawsuit is a farce. I do think Armstrong should lose his shirt in all the other legal action against him but this to me seems like another example of big government run amuck.


I think that's the purpose of a whistle blower suit -- to get insiders to rat out their buddies.


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## JCavilia (Sep 12, 2005)

CliffordK said:


> Maybe I'm missing something, but what do Americans benefit from the USPS advertising in Europe? Are the Europeans going to be sending more US mail, or arguing for or against Saturday delivery?


USPS was pushing express mail and similar profitable services directly to European residents. They were trying to increase their market share there. I heard the same accounts at the time -- that the advertising value was a bargain. I'm always a little skeptical of calculations of the value of advertising, but that's what was consistently said at the time.


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## CliffordK (Jun 6, 2014)

Ok...
So, I know DHL (Deutsche Post) is big around the world. Perhaps USPS was trying to compete in a similar fashion, and I just don't see it from here.

Lance Armstrong was a celebrity at that time, the "comeback king", "cancer survivor", etc. As far as ad bucks... might as well sponsor the winner. Nobody would have given him a second glance had he, and his team finished at the back of the pack every time.

It sounds to me a little like paying for a service. Getting their ad benefits, then deciding to renege on their deal. No doubt, if the advertising was effective, then the USPS made money on Armstrong's cheating. Has Trek lost money from making Tour de France winning bicycles?

The bigger question should be how much benefit should professional athletes who cheat reap from their cheating?

Perhaps the clawback suits should be used to pay for the drug testing by games, sports, and athletic associations around the world.


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## Jwiffle (Mar 18, 2005)

Gregory Taylor said:


> Lance is not the only defendant.
> 
> Floyd sued everyone who had an ownership or management interest in the team, or potentially knew about the doping.
> 
> ...


well, that would make more sense. just that all the articles I read make it sound like Armstrong is the only one who stands to lose anything and is being held solely responsible.

since Landis also participated in the cheating, can the feds add him to their list of defendants? then he'd win some and lose some. he'd probably still come out ahead, I guess.


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## Gregory Taylor (Mar 29, 2002)

Lance isn't the only one on the hook; only the most famous.

It is unlikely that Landis (or other riders) will be added as defendants. The suit (properly) focuses on the owners of the team and management - the folks who would be in a position of authority to make the representations to the Government that in exchange for sponsorship they would run a clean team or that the doping allegations aimed and Lance and others were false. Landis and the other riders may have cheated, but they were not in a position of authority vis-a-vis the corporations (Montgomery, Tailwind, etc.) that owned the team and did the actual contracting with the Government. The riders worked for Tailwind, etc., and weren't managers or owners. Lance is different because he actually had an ownership stake in Tailwind Sports beginning in 2004. The Government may also be out of time to add additional parties as defendants - but I'm not sure about that.


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## Tschai (Jun 19, 2003)

Jsince Landis also participated in the cheating said:


> Without whistleblower protection, there would be no whistleblowers.


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## Kliemann53 (Jun 25, 2012)

Didn't USPS sign with Tailwind 2 years before Armstrong was on the team, and end before he became an owner?


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## CliffordK (Jun 6, 2014)

I haven't followed it closely. But when did Landis step forward? If I remember right, Lance Armstrong failed a drug test and got caught doping with testosterone during his last tour de France race 2005, I think.

It may have taken some time for the organization to unravel, but no doubt after that failed drug test, things were already going down the drain. 

I'm seeing that the USPS sponsored the cycling team from 2005 to 2007.

Any sponsoring of the team after the 2005 Tour De France doping incident should have to have been with full knowledge of the doping incident.

For a government organization, if their top athlete gets caught doping, what is the response? Hit the snooze button?


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## burgrat (Nov 18, 2005)

CliffordK said:


> I haven't followed it closely. But when did Landis step forward? If I remember right, *Lance Armstrong failed a drug test and got caught doping with testosterone during his last tour de France race 2005*, I think.
> 
> It may have taken some time for the organization to unravel, but no doubt after that failed drug test, things were already going down the drain.
> 
> ...


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## CliffordK (Jun 6, 2014)

Lance Armstrong's failure of a drug test occurred between stages of his last Tour de France (2005). He was caught doping with testosterone which was publicized internationally during the race. I'm not sure why they let him finish the race, but he was such a celebrity, that it might have caused an international incident to remove him.

I remember hearing about the incident in disbelief, and Lance, of course, denied it at the time. 

I think it was just a single failed test. However, I would have thought it would have triggered an investigation both in France and the USA.

I have troubles accepting that the USPS is crying foul when they continued to sponsor Tailwind after Armstrong's failed drug test, and allowing him to participate in a management role in the company


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## burgrat (Nov 18, 2005)

CliffordK said:


> Lance Armstrong's failure of a drug test occurred between stages of his last Tour de France (2005). He was caught doping with testosterone which was publicized internationally during the race. I'm not sure why they let him finish the race, but he was such a celebrity, that it might have caused an international incident to remove him.
> 
> I remember hearing about the incident in disbelief, and Lance, of course, denied it at the time.
> 
> ...


Do you have a link to this failed test? I think you have your info wrong.

The failed corticosteroid test was in 1999 and was covered up with a retro dated TUE. In 2005 (August) the retroactively-tested urine samples from 1999 showed up with EPO in them. That was reported in _L'Equipe_ after Armstrong's 2005 Tour was done.

Also USPS sponsorship ended in 2004, after which Discovery Channel took over.


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## Gregory Taylor (Mar 29, 2002)

Per the Wall Street Journal "Marketwatch" - on Thursday the Court denied Armstrong's motion to dismiss. Armstrong argued that (1) the USPS got what it bargained for, i.e. exposure and publicity, and (2) the government's suit is untimely because they could have investigated and acted earlier. I haven't read the order, but I will get a copy on Monday.

Back to the "why Armstrong?" question - liability under the False Claims Act can be attached to folks who present fraudulent claims to the government for payment, but also those who conspire with those who make the demand. Armstrong, if the allegations are true, could rationally have an exposure here even if he may not have had an ownership interest in Tailwind, etc., prior to 2004. He had enough sway over management and ownership. I've not pulled the pleadings on the case, so this is all speculation on my part (based on some knowledge of the False Claims Act) as to how this was actually pled by the Government (and Landis). 

It is also alleged that Armstrong directly received $20 million from the deal. If that's true, and his culpability can be proved, that's probably where the discussions start on the size of his liability.


WASHINGTON—A federal judge on Thursday said the Justice Department can proceed with a civil lawsuit alleging cyclist Lance Armstrong defrauded the government by accepting sponsorship money from the U.S. Postal Service while taking performance-enhancing drugs.

U.S. Judge Robert L. Wilkins in Washington, D.C., denied a request by Armstrong to dismiss the case in ruling the lawsuit could proceed.

The case started with a whistleblower lawsuit by former teammate Floyd Landis, who sued on behalf of the federal government in 2010. The False Claims Act allows private litigants like Landis to bring lawsuits claiming fraud against the government and share in any monetary recoveries.

The Justice Department decided last year to intervene in Landis’s case and filed its own superseding allegations against Armstrong. Government lawyers allege Armstrong’s cycling team defrauded the Postal Service because the two sides’ sponsorship agreement required the team to follow the rules of cycling’s governing bodies, which banned the use of performance-enhancing drugs.

The department said the Postal Service was deceived into paying $40 million to Armstrong’s team from 1998 to 2004, half of which went to Armstrong personally.

Armstrong admitted last year to doping throughout his cycling career and has been stripped of his seven Tour de France titles. If he and other defendants are found liable for making false claims, they could be forced to pay damages amounting to three times the amount of the claims.

Landis also has admitted to doping and was stripped of his 2006 Tour de France title.

Armstrong, in seeking to have the lawsuit dismissed, argued the government waited more than a decade to file its suit because the Postal Service got everything it bargained for: tens of millions of dollars of publicity and exposure to millions of spectators at cycling events. He argued it was far too late to revisit the sponsorship now, when the government could have investigated doping allegations much earlier.


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## DrSmile (Jul 22, 2006)

I still see a tough fight ahead for the actual trial case. I would think the government would have to show damages, of which there don't seem to be any. I see this whole case either being settled or the damages amount being trivial compared to the $100 million being pursued.

FYI Weisel has been dismissed from Floyd's suit in this ruling, and probably the entire suit. According to Bloomberg, Armstrong only made $17.9 million from the USPS contract, while garnering over $180 million in endorsements. Even if he's held liable for triple damages of his salary, he should still walk away with tens of millions.


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## Doctor Falsetti (Sep 24, 2010)

The stated goal of the sponsorship was to increase international business revenue. During the period of the sponsorship international business revenue DROPPED. 

The fact that revenue decreased or that USPS got lots of exposure has little to do with the case. Armstrong's defense is that USPS must have known he was doping. They knew what they were paying for. The Feds/Landis position is Lance, and his co-conspirators, lied, mislead, and defrauded USPS in order to enrich themselves. 

Lance actually has an interesting case but so far most of the rulings have not gone his way. He is in for a long fight


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