Lance Armstrong has agreed to pay $5,000,000 to settle claims that he defrauded the federal government by using performance-enhancing drugs at the time that the US Postal Service sponsored his cycling team. It is reported that the US Postal Service paid Armstrong and his cycling team as much as $40,000,000 as part of the sponsorship.
In 2013, Armstrong admitted that he had used banned substances whilst competing in a number of cycling races, which includes seven Tour de France titles from 1999 to 2005. The United States Anti-Doping Agency investigated Armstrong and stripped him of all of his Tour de France titles, concluding that he had in fact been doping during this period.
Armstrong was accused of misleading the US Postal Service, which is a government institution and thus purported to damage the brand and reputation of the institution.
Armstrong questioned whether the US Postal Service actually suffered any harm or damage as a result of his doping. Armstrong wore a jersey with the US Postal Service logo on the front of it in six of his Tour de France victories. The US Postal Service claims that it would not have sponsored Armstrong had it had knowledge of his doping.
Before settling, the US government was pursuing up to $100,000,000 in damages before court due to the operation of treble damages in US law, which enabled the government to recover triple the amount of sponsorship funds paid by the US Postal Service. In instances where government money was obtained by fraud, treble damages are available to the plaintiff.
One of Armstrong’s teammates, Floyd Landis, acted as whistle-blower in the case. He was also involved in doping and won the 2006 Tour de France (of which his title was stripped). Landis brought the original claim under the False Claims Act in 2010, which provides for whistle-blowers to pursue cases of fraud on behalf of the US government. Landis will receive $1,100,000 of the settlement sum as well as an additional $1,650,000 for his legal costs (paid for by Lance Armstrong).