Blowing the Whistle on Lance Armstrong

02/04/2013 // Whistleblower Law Firm (Press Release) // Keller Grover LLP // (press release)

When Lance Armstrong sat down with Oprah Winfrey and admitted that he had used banned performance-enhancing drugs, most viewers already knew the backstory: For years, there had been rumors and accusations that the famed cyclist had been ‘doping’ — and for years he had steadfastly denied it. There had been investigations that went nowhere and heated speculation that went unabated — until 2012 when the U.S. Anti-Doping Agency issued a 1,000-page report that accused Armstrong of masterminding a doping scheme while racing his way to multiple Tour de France wins. The cyclist was stripped of his Tour titles, and lost most of his endorsement deals. Yet what few viewers likely knew was the connection between Armstrong and a whistleblower lawsuit — and the role that whistleblower suit may have played in getting at the truth that for so long had been elusive.

Whistleblower lawsuits aren’t typically the first thing to come to mind when one thinks of competitive cycling. But the suit — filed in 2010 by Armstrong’s former teammate Floyd Landis and kept under seal since — alleges, according to reports in multiple media outlets, including The Wall Street Journal, that Armstrong and his racing team’s managers defrauded the U.S. government when it took sponsorship money from the U.S. Postal Service. Under terms of a contract between the team and the Postal Service, the cyclists were prohibited from using performance enhancing drugs. The suit aims at clawing back some $30 million in taxpayer funds that were paid out over the course of the Postal Service’s sponsorship.

Recovering payments stemming from fraud against the government has, for more than a century and a half, been the foundation for the cornerstone statute in whistleblower law: the federal False Claims Act. Born out of the U.S. Civil War, when government contracts were rife with fraud, the False Claims Act remains, today, an extremely potent weapon in fighting — and reversing — improper practices that line the pockets of bad actors and defrauds taxpayers. Landis’s case, brought under the False Claims Act, can now be joined by the government (a decision that is currently pending). If so, the government would essentially take over the case, though Landis, like all whistleblowers, would stand to receive a significant percentage of any recovery the government ultimately obtains.

“Landis’s whistleblower lawsuit shows just how far-reaching the whistleblower statutes can be,” says Jeffrey F. Keller, a founding partner at Keller Grover, a nationally recognized labor and employment law firm, and a veteran whistleblower lawyer who is not involved in Landis’ case. “Here you have a subject — cycling — that would seem to have nothing to do with the government or with taxpayers, but at the heart of this case you have all the crucial elements in traditional False Claims Act lawsuits: a contract with the government, alleged fraud, and a payment that, the whistleblower claims, stemmed from that fraud.”

The Landis suit also shows the potential power whistleblower lawsuits can have at getting at the truth. Was Armstrong’s ‘confession’ sparked by the suit? We may never know for sure, but in case after case, in areas from pharmaceuticals to defense contracts, whistleblower lawsuits have not only resulted in recoveries, but uncoverings — getting at the truth behind controversial and contested behavior.

“All eyes may be on Armstrong’s interview with Oprah, but in the end, it may be a little known whistleblower lawsuit that has the biggest — and most potent — impact,” says Keller, whose firm has offices in San Francisco and Los Angeles. “If the lawsuit ultimately is able to claw back sponsorship money improperly paid to Armstrong and his team, it won’t just be a victory for truth, but for taxpayers. And that’s what the False Claims Act was really designed to provide: a win for all of us.”

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