US goes after Lance Armstrong's USPS riches
The Justice Department has laid out its claims against the disgraced cyclist, alleging he violated his $40 million deal.
Disgraced cyclist Lance Armstrong was finding his legal situation growing more complicated as the U.S. government laid out its case against him on Tuesday.
The Justice Department filed a formal complaint that alleges Armstrong violated his contract with the U.S. Postal Service and was "unjustly enriched" after cheating to win the Tour de France, The Associated Press reports.
For Armstrong, the case could prove extremely costly because the government said it would seek triple damages. The Postal Service shelled out about $40 million to sponsor Armstrong's teams for six of his seven victories, and the filing said the USPS paid Armstrong $17 million.
The lawsuit was filed amid tough times for the USPS, as well. The agency, which has been criticized by some consumers for its lucrative payments to Armstrong, is losing $25 million a day, as Postmaster General Patrick R. Donahoe testified last week.
Even if the government succeeds in winning the case against Armstrong, any judgment isn't likely to make a dent in the USPS' dreadful financial situation, given that its losses mounted to $15.9 billion last year.
But as reported in January, Armstrong's doping confession during an interview with Oprah Winfrey opened him up to legal challenges and negotiations with prior supporters. When Nike (NKE) called to tell him it was dropping him from its roster, Armstrong described it as a "$75 million day -- gone."
During a March interview with Sports Illustrated, Armstrong said he would fight the lawsuits that threatened his fortune. Since turning professional, the cyclist reaped at least $221 million, Bloomberg estimates.
Armstrong's attorney disputed the Justice Department's claims, calling the lawsuit "opportunistic" and "insincere," according to Bloomberg. "The USPS was never the victim of fraud. Lance Armstrong rode his heart out for the USPS team, and gave the brand tremendous exposure during the sponsorship years," his attorney, Elliot Peters, said in an emailed statement.
The complaint was filed under the False Claims Act and joins a lawsuit that was brought by former teammate Floyd Landis. Also named in the complaint were Armstrong's team manager, Johan Bruyneel, team owner Tailwind Sports Corp. and investment manager Thomas Weisel.
Follow Aimee Picchi on Twitter at @aimeepicchi.
40 million dollars to sponsor 6 teams of bicycle riders for the tour d' france?
He'll still probably end up independently wealthy. If he wasn't such a sociopath, I'd feel sorry for him, but he doesn't feel sorry about anything, ever.
If the reports of a culture of doping are to be believed, then the couple dozen riders every year on the Postal roster should be included. Why not go after every Postal worker fired for theft, DUIs and drug use. They were enriched with their paycheck every week until they got caught too.
Government should be able to squeeze some millions out of them too.
Oh ya, like I did not even know the Postal Service existed before Lance Armstrong and the Tour De France. Once I saw this Postal Service thingy was sponsoring, I ran out and mailed letters and packages like crazy. No wonder they are losing money hand over fist, making stupid decisions such as sponsoring a bunch of bike riders. Who thought of and supported this marketing scam anyways? A poor return on invested dollars if I ever saw one. How did they expect to get a return on invested dollars? More useres of the USPS? Where was the outrage for such a stupid waste of dollars?
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