Former cyclist Lance Armstrong has agreed to pay $5 million to the federal government to settle the government's civil fraud lawsuit against him, just weeks before the case was scheduled to go to trial with nearly $100 million at stake.
As part of the settlement, Armstrong also will pay $1.65 million to Floyd Landis, his legal enemy and former cycling teammate.
Landis' attorney, Paul Scott, confirmed Landis and his legal team will receive $2.75 million total from the deal, including a $1.1 million cut from the government's $5 million recovery. Landis, who confessed to doping in 2010, is the whistleblower who brought this case to the government's attention that year.
The trial was scheduled to begin May 7 in Washington, D.C. The Justice Department issued a statement Thursday saying "no one is above the law."
"A competitor who intentionally uses illegal (performance-enhancing drugs) not only deceives fellow competitors and fans, but also sponsors, who help make sporting competitions possible," said a statement from Chad Readler, acting Assistant Attorney General for the Justice Department's Civil Division. "This settlement demonstrates that those who cheat the government will be held accountable."
The federal government had sued Armstrong in 2013, a few months after he admitted to extensive use of performance-enhancing drugs and blood transfusions in a televised interview with talk-show host Oprah Winfrey. The government filed the suit on behalf of the U.S. Postal Service, which paid $32.3 million to sponsor Armstrong's cycling team from 2000 to 2004, much of which went into Armstrong's pocket.
Armstrong said in a statement that he is happy to have "made peace with the Postal Service." After surviving cancer, Armstrong wore the Postal Service jersey at the height of his fame in professional cycling.
"While I believe that (the USPS) lawsuit against me was meritless and unfair, and while I am spending a lot of money to resolve it, I have since 2013 tried to take full responsibility for my mistakes and inappropriate conduct, and make amends wherever possible," he said. "I rode my heart out for the Postal cycling team, and was always especially proud to wear the red, white and blue eagle on my chest when competing in the Tour de France. Those memories are very real and mean a lot to me."
The government had sought to recoup the $32.3 million in triple under the False Claims Act – nearly $100 million. It said the Postal Service never would have paid for the sponsorship if it had known Armstrong and his teammates were doping in violation of the team's sponsorship contract.
Armstrong, 46, had falsely denied doping for more than a decade before his confession. From the government's point of view, he lied about it for so long to keep getting paid at the expense of the Postal Service. He did not face prison if he was found liable in this case, but could have face significant financial penalties and damages.
The Justice Department declined to file a criminal case against him in 2012 and instead opted to join a lawsuit originally filed under seal in 2010 by Landis, who also was the subject of a separate fraud case by the government.
As a government whistleblower in this case, Landis stood to get up to 25% of the cut. Scott confirmed to USA TODAY Sports that the settlement calls for payment of $5 million to the United States and $1.65 million to Landis and his attorneys. Additionally, Landis will get a 22% cut of the government's $5 million recovery: $1.1 million, for a total of $2.75 million to Landis and his legal team. The means the government recoups $3.9 million out of $6.65 million paid by Armstrong in the settlement.
"I am pleased with the settlement and gratified to see the allegations against Lance finally resolved after eight years of litigation," Landis said in a statement. "It has been a difficult ordeal and public opinion was not always on my side, but it was the right thing to do, and I am hopeful that some positive changes for cycling and sport in general will be the result. I'm looking forward to spending more time with my family and more energy on my new business ventures."
This case was not about whether Armstrong cheated in races. Instead, it focused on whether he caused false claims to be submitted to the government for payment and whether the Postal Service was damaged by Armstrong's doping.
Armstrong's attorneys argued that the Postal Service should have known about the doping back then but essentially didn't care. They had assembled evidence to show that the Postal Service received far more in promotional value that what it paid for the sponsorship.
"The Postal Service and Landis had sought $100 million in damages from Lance, but in light of several significant court rulings rejecting and limiting the plaintiffs' damages theories, the case today settled for $5 million, plus an additional amount to pay attorneys' fees to Landis' lawyer," said Armstrong's attorney, Elliot Peters of Keker Van Nest & Peters, LLP. "Lance is delighted to put this behind him."
Jury selection for the trial was to begin May 1, and a pretrial conference for the case was scheduled for Monday.
This case was the biggest legal risk for Armstrong after his confession in 2013. Other civil fraud lawsuits against him were settled or dismissed.
Before this settlement, Armstrong had indicated to USA TODAY Sports that he had paid more than $100 million in unspecified legal costs, including expenses from other lawsuits.
In 2012, Armstrong was banned from sanctioned cycling events for life and stripped of all seven of his titles in the Tour de France from 1999 to 2005.
Like Armstrong, Landis falsely denied doping before admitting it in 2010. Before his confession, Landis even raised money from donors to fund his defense against the doping charge – an effort that led to his own prosecution for fraud by the government in a separate case. Landis then entered a deferred prosecution agreement to pay $478,000 in restitution to the donors.