Lance Armstrong finishes the Power of Four Mountain Bike Race on Aspen Mountain on August 25, 2012.
The Justice Department has joined a civil lawsuit against cyclist Lance Armstrong, his Tailwind Sports team and its longtime manager, alleging their pervasive doping campaign defrauded the U.S. Postal Service out of more than $31 million in sponsorship fees.
The decision ratchets up the legal pressure on Armstrong, who's lost his seven Tour de France titles, enormous advertising and sponsorship deals, and a large part of his reputation.
Lawyers for the cyclist had been negotiating with Justice Department leaders but those settlement talks broke down in recent weeks "because we disagree about whether the Postal Service was damaged," Armstrong's attorney Robert Luskin said in a written statement.
"The Postal Service's own studies show that the Service benefited tremendously from its sponsorship – benefits totaling more than $100 million," Luskin added.
But people at the highest levels of the U.S. government don't see it that way. Authorities said Armstrong and other riders on the team "knowingly" violated agreements that required them to wear the Postal Service logo and follow the rules of the sport's governing bodies — rules that banned the use of certain performance enhancing substances and methods.
Armstrong admitted using some banned substances in a recent TV interview with Oprah Winfrey but anti doping officials say he didn't come clean about how recently he had stopped the practice.
"This lawsuit is designed to help the Postal Service recoup the tens of millions of dollars it paid out to the Tailwind cycling team based on years of broken promises," said Washington, D.C. U.S. Attorney Ron Machen.
The Postal Service sponsored the team owned by Tailwind and predecessors from 1996 to 2004 — dates that could become important if Armstrong argues the statute of limitations on the fraud has expired.
The Justice Department says it will detail its allegations against Tailwind, Armstrong and longtime team manager Johan Bruyneel within 60 days. Authorities are joining a case filed in 2010 by Floyd Landis, who rode with the Postal Service sponsored team. The case was filed under the federal False Claims Act, a Civil War era law that allows whistleblowers to sue when the government is defrauded and to collect a portion of any winnings.
"Today's action demonstrates the Department of Justice's steadfast commitment to safeguarding federal funds and making sure that contractors live up to their promises," said Stuart Delery, a principal deputy assistant attorney general.