The US Justice Department has filed a formal complaint against Lance Armstrong, saying the doping-disgraced cyclist and team owners defrauded the US Postal Service of sponsorship money.
The government, which said in February that it would join a whistle-blower lawsuit brought by former Armstrong teammate Floyd Landis in 2010, says the USPS spent about $40 million in sponsor money and gave Armstrong $17 million.
Armstrong admitted last January that he took performance-enhancing drugs when he won the Tour de France seven times after having been stripped of the crowns based upon a US Anti-Doping Agency (USADA) investigation.
That prompted the US government’s involvement in the fraud case, and it now seeks triple damages in a jury trial, according to the complaint as detailed Tuesday by NBC News and the Austin American-Statesman, Armstrong’s hometown newspaper.
That could mean a total $150 million hit for Armstrong.
“Because the defendants’ misconduct undermined the value of the sponsorship to the USPS, the United States suffered damages in that it did not receive the value of the services for which it bargained,” the newspaper quoted the complaint as saying.
The elaborate scheme to evade doping detection uncovered by USADA was cited in the complaint, which said Armstrong team manager Johan Bruyneel knowingly took part in a doping program in violation of their sponsorship contract.
“Riders on the USPS-sponsored team, including Armstrong, knowingly caused material violations of the sponsorship agreements by regularly and systematically employing banned substances and methods to enhance their performance,” the complaint claimed according to NBC.
“Defendants were unjustly enriched to the extent of the payments and other benefits they received from the USPS, either directly or indirectly.”
Elliot Peters, Armstrong’s attorney, disputed whether the USPS suffered any damage as a result of its 1998-2004 sponsorship of the team.
“The DOJ’s complaint against Lance Armstrong is opportunistic and insincere,” Peters said in a statement sent to AFP.
“The US Postal Service benefited tremendously from its sponsorship of the cycling team. Its own studies repeatedly and conclusively prove this. The USPS was never the victim of fraud.”
“Lance Armstrong rode his heart out for the USPS team and gave the brand tremendous exposure during the sponsorship years.”
Studies commissioned by the USPS said the team generated about $100 million in exposure and brand awareness for the postal service, but how that brand might be tarnished in the wake of the doping revelations has not been studied.