Wednesday, April 24, 2013

U.S. Justice Department Sues Lance Armstrong For Millions

Yesterday the U.S. Justice Department announced its intentions to recoup millions of dollars that were paid to Lance Armstrong by the U.S. Postal Service when it sponsored his team from 1998 to 2004. During that period, the team received more than $40 million, of which $17 million went to Armstrong who rode to six of his seven Tour de France wins under the USPS banner. 

 In the lawsuit the Justice Department says the former pro cyclist was "unjustly enriched" by using performance enhancing drugs to win the Tour. Furthermore, they point out that the sponsorship agreement prohibits the use of banned substances and that Armstrong committed fraud by agreeing to those terms and yet knowingly used PED's anyway. The suit looks to reclaim triple the damages that could be awarded by a jury. Johan Bruyneel, the USPS team director and  management company Tailwind Sports were also named as defendants.

This new case joins a federal whistle-blower lawsuit that has been brought against Armstrong by former team-mate Floyd Landis, who also tested positive for high levels of testosterone in the 2005 Tour de France, and subsequently had his titled stripped at the time. Tuesday was the deadline for moving forward with the case. 

It'll be interesting to see how this all plays out. On the one hand, Lance clearly knew he was doping while he was taking the USPS money, but on the other hand it'll be difficult to prove any damages. Clearly all of Armstrong's sponsors benefited by being associated with him at the time, probably to the benefit of far more cash than they actually paid him. But in this case, we are talking about U.S. tax dollars and a breach of contract. How a jury will be swayed on this one way or another could be fascinating to watch.

This isn't the only legal headache that Armstrong is facing at the moment. Sports-promotions company SCA of Dallas, TX is also suing to get $12 million in bonuses back, while the Sunday Times of London is hoping to recover $500,000 paid out in the settlement of a libel case that later proved to be true. With all of these mountain financial issues, it's no wonder that Lance recently sold his home here in Austin. 

And I thought I was having a rough year. 

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