Saturday, September 4, 2010

U.S. Justice Department May Join The Fun in the Lance Armstrong Investigation

The WSJ reported today that Floyd Landis filed a whistleblower lawsuit under the Federal False Claims Act. This act encourages whistleblowers to report when the government has been defrauded. Similarly, I blogged before that the recently passed Dodd-Frank bill also encourages whistleblowers for cases subject to litigation by the SEC. As it turns out, whistleblowers are the number one way that fraud is detected and the government has decided to reward whistleblowers for coming forward. In this case, if the government sues Lance or the former U.S. Postal Team for fraud and is able to collect then Floyd will get 30% of the money. Of course, Landis will have to hire a legal team to make his case so government incentive is justified in my view.

Predictably, the reaction from the Armstrong PR campaign was twofold: First, why is the U.S. government spending money investigating a philanthropist athlete who races his bike on foreign soil. Second, this shows that Floyd Landis is a money grubbing liar like we've been saying all along. However, the Justice Department may not be listening. Here is why.

I'm not sure that either of these reactions warrant comment but in response to the first rant, the US Postal Service cycling team was paid over $30 million for Lance and others to race bikes without doping (as specified in the contract) and serious allegations of doping constitute fraudulent use of the $30 million. In addition, if Lance did cheat then he built his philanthropic and other empires on fraud and took fame, fortune, and glory that rightfully belongs to other cyclists who did not cheat. As far as justice goes, using fraudulently obtained riches, fame and glory to do good in the cancer community, isn't enough reason to look the other way. Apparently, the Justice Department may not look the other way either as the WSJ reports that they may join Landis in the lawsuit.

As for Landis making these claims of doping for money, well, I think this will be a hard way to earn some cash if the case has no merits. Thus, it appears that Landis and his legal team must think there is a reasonable probability that the government will show fraud did occur. If Landis was simply making up things, he would be insane to hire a legal team and file a whistleblower lawsuit. In my opinion, it's not looking real good for Lance...

1 comment:

  1. I seriously doubt the government would join in any Landis lawsuit. A real stretch under the Federal False Claims Act! The Dodd-Frank bill couldn't include anything that makes sense and not even applicable here. Two of the biggest posers in Congress and should be fired. Dodd and Frank have even less credibility than Landis...if that's possible.