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.

By Aimee Picchi Apr 24, 2013 11:39AM

File photo of Lance Armstrong competing for the US Postal Service Team at the 1998 First Union US PRO Cycling Championships (© PCN/Corbis)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

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Apr 24, 2013 1:40PM
If the USPS was in dire straights they should not have been shelling out money for "advertisement" and sponsorship.
Apr 24, 2013 1:42PM
I believe the american public should sue the postal service for wasting 40 million dollars. Every day the postal service state they are losing money and made a poor choice of wasting the money. Do not yell we are losing money and then throw 40 million away. Someone needs to be fired for this mistake and we the people should sue. 
Apr 24, 2013 1:42PM
How did taxpayer money get in his pocket?  Someone else should be brough to justice as well.
Apr 24, 2013 2:08PM
the post office is billions in debt & they pay 40 million to someone to do what...this ,country is so screwed up,planes are not flying because those idiots in dc  can't fix the budget, they give billions to countries who hate our guts 
Apr 24, 2013 1:03PM
Please...make it quick and painless for everyone...just "take" half of his fortune....and then let's not hear about him anymore. We're all tired.
Apr 24, 2013 2:11PM

40 million dollars to sponsor 6 teams of bicycle riders for the tour d' france?



Apr 24, 2013 1:36PM
This lawsuit is BS.  The Postal Service got every bit of advertising that it payed for.  They were plastered all over TV for a good 7 years.  And now that he's back in the news, they get more publicity.  
Apr 24, 2013 2:01PM
And now we know why the US Post Office is broke!!
Apr 24, 2013 1:39PM
It's tough because even though he cheated and lied, he still made a ton of money for Cancer.

Apr 24, 2013 1:19PM

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.

Apr 24, 2013 2:31PM
Hey Lance- just tell the Post Office you sent them a refund check, but it got lost in the mail.
Apr 24, 2013 1:00PM
Apr 24, 2013 1:52PM
So since probably almost all cyclists did something against the rules they should all be sued by all their sponsors?? Come on idiots, if all cyclists had been pursued the way Armstrong has for the past decade they would all be found guilty. And I suppose sponsors of baseball and football should sue because there are players who used banned substances?? That's one of the biggest problems in this country today, besides Obuma and the socialists, is that everybody wants to sue everybody for everything. It's part of the free ride mentality that allows the socialists to come to power. Promise me everything and that you will only take from other people and you have my vote. Funny, in the end it never works out that way.
Apr 24, 2013 1:43PM
I have a friend who's an inveterate Lance Armstrong advocate. Her response to Armstrong's cheating, through the use of performance enhancing drugs; his demonizing of critics before he was caught red handed and the multi millions of American greenback dollar bills he's amassed through his reprehensible and scurrilous behavior is, "I don't care." I also "don't care" what happens to him in the future; however, I'm extremely tired of hearing about him, his use of steroids and his continuing legal battles. It's going to cost us [the good, old American taxpayer] millions of dollars to pursue legal remedies in this case, and I don't wish to see another debacle such as the Barry "Balco" Bonds and the Roger Clemens twin fiascos.  
Apr 24, 2013 2:05PM
I am curious if there are also filings against every other USPS employee that was "unjustly enriched" while under contract.

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.

Apr 24, 2013 1:54PM
WHy since they do this on a daily basis on wall street?
Apr 24, 2013 1:52PM
Unless there was some clause in the contract he had with USPS stating he would have to return his sponsorship monies in the event of some sort of public scandal, then he really doesn't have to return it.
Apr 24, 2013 2:08PM

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?

Apr 24, 2013 3:09PM
So how much more money will be wasted trying to pry what's left from this guys hands?? Go after the real money go after politicians their the real crooks!!!
Apr 24, 2013 1:41PM
He's lost his huge Texas mansion in which it was a labor of love for him.  He'll end up as broke as the post office.  Jay Leno joke. 
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