One of the most famous modern day whistleblower lawsuits is that brought against Lance Armstrong by his former teammate, Floyd Landis. Using a Civil War era statute, Landis sued Armstrong on behalf of the United States Postal Service.
After admitting to using performance enhancing drugs, Armstrong was the subject of multiple legal actions. In addition to Landis’ suit brought under the federal False Claims Act, Armstrong was also sued by his former promotional company, SCA Promotions. The British paper Sunday Times reported over the weekend that the SCA lawsuit had settled.
In 2005, SCA Promotions refused to pay Armstrong a $5 million bonus for winning the Tour de France. Armstrong filed a claim against SCA and ultimately was awarded $7.5 million. During that case, Armstrong testified under oath that he never used steroids or other performance drugs. After later admitting to doping and being stripped of his 7 Tour de France gold medals, SCA reopened the case.
In overturning the original arbitration award in favor of Armstrong the panel said, “Perjury must never be profitable. Tailwind Sports Corp [Armstrong’s management company] and Lance Armstrong have justly earned wide public condemnation. That is an inadequate deterrent. Deception demands real, meaningful sanctions.”
The Sunday Times reports that case was settled for $10 million. If true, that just leaves Armstrong facing Landis’ whistleblower suit.
The federal government wants back $30 million of sponsorship money it says it paid Armstrong and his management company.
Under the False Claims Act, Armstrong is potentially facing triple damages or $90 million. For being the whistleblower that brought the suit, Landis could receive between 15% and 30% of whatever the Postal Service collects.
Armstrong has been aggressively battling the False Claims Act suit in recent months but the purported settlement of the SCA case may signal a change in tactics. If guilty of the claims brought by Landis, Armstrong would be better off settling than going to trial and potentially losing everything.
False Claims Act
The False Claims Act allows people with inside information about fraud involving a government program or funds to file a lawsuit on behalf of the government. If successful, a whistleblower can receive a percentage of whatever is collected from the wrongdoer.
Generally only the first to file is entitled to the award.
After having the opportunity to investigate, the Justice Department must decide whether it wishes to intervene and take over the suit or allow the whistleblower and his or her lawyer to prosecute. If the whistleblower must prosecute the percentage award is generally much higher.
If you have information about fraud and wish to become a whistleblower, give us a call. Our mission is to help you expose and stop fraud and receive the maximum award possible. In the last year our whistleblower clients have received over $100 million in award monies.
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