Report: Justice Dept. Officials Recommend that U.S. Join Whistleblower Suit Against Armstrong
By Mary Jacoby | January 14, 2013 9:31 pm

Justice Department officials have made a preliminary recommendation that the government join a civil whistleblower lawsuit against disgraced cyclist Lance Armstrong, the Wall Street Journal reported.

Robert Chandler, an attorney in the department’s Commercial Litigation Branch, has been interviewing potential witnesses in the case, according to the Journal.

The news came as the Associated Press reported that Armstrong admitted to doping in a taped interview with Oprah Winfrey to be aired on Thursday.

The False Claims Act lawsuit was filed by Armstrong’s former teammate Floyd Landis, who says Armstrong defrauded the U.S. Postal Service with his doping. The Postal Service paid $30.6 million to sponsor Armstrong’s cycling team from 2001 through 2004, the Journal reported, saying it had reviewed the contract.

The contract said “negative publicity” due to “alleged possession, use or sale of banned substances” by riders or others with the team would constitute an “event of default,” according to the Journal.

Under the False Claims Act, a whistleblower stands to gain up to 30 percent of any recovery to the government. The statute allows up to treble damages – which means Armstrong could be on the hook for nearly $100 million if the suit is succesful.

The chance of a whistleblower lawsuit succeeding are increased when the government choses to join them. Landis’s lawsuit was filed under seal, as required by law. The sealing is intended to give the government time to evaluate whether to join the suit. The government may also engage in negotiations to settle a False Claims Act suit before deciding whether to intervene. The Journal reported that Armstrong’s lawyers were attempting to settle but that negotiations with department have not produced a resolution.

The lawyers working for Armstrong on the matter included Robert Luskin and Patrick Slevin at Patton Boggs LLP; John Keker and Elliot Peters at Keker & Van Nest, and attorneys from Sheppard Mullin Richter & Hampton LLP, the Journal reported.

Armstrong’s long-time local counsel in Austin, Tex., Tim Herman, has also been advising him. In February 2012, the U.S. Attorney’s office in Los Angeles dropped a criminal probe of Armstrong.

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