It’s rare for a False Claims Act case to involve sports—much less “what was arguably the greatest fraud in the history of professional sports.” But that’s how the government described the conduct of Lance Armstrong in its ongoing FCA case against the former cycling champion.
From around 1996 through 2004, the United States Postal Service sponsored a cycling team of which Armstrong was the lead rider. In order to sponsor the team, the USPS paid approximately $40 million. The sponsorship agreements required the USPS team to follow the rules of cycling’s governing bodies, which prohibited the use of certain performance enhancing substances and methods. The government now claims that Armstrong violated the terms of the sponsorship agreements by using illegal substances and methods, and that Armstrong falsely denied doing so in order to conceal his cheating and retain the sponsorship money.
In June 2010, Armstrong’s former teammate, Floyd Landis, filed a qui tam suit under the FCA alleging that Landis, Armstrong, and others on the USPS team used banned substances and methods. Later, after Armstrong admitted during an interview with Oprah Winfrey that he used banned substances and methods for years, the government intervened in Landis’s FCA suit.
In July 2013, Armstrong filed a motion to dismiss, arguing that the government’s claims are barred by the FCA’s six-year statute of limitations. According to Armstrong, the government was aware for years of media coverage regarding possible doping by the USPS team, and even knew French authorities opened an investigation into the team’s possible use of banned drugs. But, rather than conducting its own investigation, the government renewed its sponsorship agreement so that it would continue to enjoy favorable publicity and other benefits. In Armstrong’s view, the government “got exactly what it bargained for”—the benefits of sponsoring a winner—and, because it waited more than six years after making its last sponsorship payment to file suit, its FCA claims are time-barred.
Recently, the government opposed Armstrong’s motion to dismiss, accusing him of carrying out “what was arguably the greatest fraud in the history of professional sports,” which allegedly deceived the USPS into paying $40 million to Armstrong’s cycling team. Disputing Armstrong’s characterization of the case, the government stated that it did not get a “winner,” but instead got “a fraud”—“decidedly not what the Government bargained for.” (Emphasis in original.) Moreover, regarding the FCA’s statute of limitations, the government asserted that it was not aware of the truth until Landis filed his complaint in 2010; that the conclusion of the French investigation (without any finding of doping) did not put the government on notice of a possible claim; and that Armstrong’s repeated denials concealed the truth for years.
The parties’ competing arguments raise important questions about what constitutes sufficient notice to start the statute of limitations in an FCA case, and how a defendant’s alleged concealment of fraud may affect the limitations period. Oral argument on Armstrong’s motion to dismiss has been scheduled for November 18, 2013.
