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DOJ says Lance Armstrong unjustly enriched by fraud; seeks damages

Attorneys from the U.S. Department of Justice (DOJ) filed a criminal complaint last week against famed and beleaguered cyclist Lance Armstrong, alleging that Armstrong engaged in fraudulent activity when he and his bicycling team were paid by the United States Postal Service (USPS) and rode under its banner. The government claims that Armstrong was unjustly enriched through abuse of the USPS contract and seeks restitution.



Most people in Missouri and throughout the rest of the country -- if not the world -- know well the story of Armstrong's Herculean rise to the top of the professional bicycling tour and his subsequent and stunning fall from grace. For years, steroid-related stories swirled around Armstrong, his team and his sport, with his reputation ultimately succumbing as evidence against him grew insurmountable.

The DOJ now says that it might seek punitive damages against Armstrong, his racing manager and former team owner under the False Claims Act, which could amount to as much as $120 million. The USPS paid Armstrong's camp $40 million in sponsorship, and federal law allows for triple damages in some fraud cases.

As some commentators have noted, the case against Armstrong seems strongly buttressed by language in the agreement between the USPS and the race team owner, which specifically cited "zero tolerance" for any doping. On that score, the evidence against Armstrong and other riders seems overwhelming.

What some people might reasonably question, though (and which has been brought up in a recent Bloomberg article), is the degree to which Armstrong was really unjustly enriched by his association with the USPS. Although the cyclist indeed made millions of dollars through the contract, it can also be said that the same was true for the USPS.

As Bloomberg queries: "Didn't the marketing executives at the Postal Service get what they paid for -- and then some -- when Armstrong pulled off his unprecedented run of Tour De France wins?"

We will keep readers apprised of material developments in this case.

Source: Bloomberg, "Lance Armstrong lied, cheated, doped, but does he really owe damages?" Brad Wieners, April 24, 2013

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