Justice Department Joins Suit Against Lance Armstrong

Disgraced cyclist Lance Armstrong has failed to talk the U.S. government out of suing him to recover sponsorship money that the U.S. Postal Service paid his teams to compete in international events, Armstrong's lawyer said on Friday.

Armstrong was stripped of his seven Tour de France titles and banned from cycling for life after accusations that he took performance-enhancing drugs. In January he said the accusations were true in an interview with television host Oprah Winfrey.

"Lance and his representatives worked constructively over these last weeks with federal lawyers to resolve this case fairly, but those talks failed because we disagree about whether the Postal Service was damaged," lawyer Robert Luskin said.

"The Postal Service's own studies show that the service benefited tremendously from its sponsorship - benefits totaling more than $100 million," the lawyer said in a statement.

Former Armstrong teammate Floyd Landis was believed to have filed a sealed whistleblower suit against Armstrong in 2010. A decision by the government to join the suit would trigger its unsealing.

A battle with the U.S. government over civil fraud charges would be a further fall in worldwide esteem for Armstrong. Criminal prosecutors have said they do not expect to charge him.

A U.S. Justice Department spokeswoman had no immediate comment. Public court records did not indicate that a lawsuit had been filed as of mid-day on Friday.

WHISTLEBLOWER LAW

The government would sue under the False Claims Act, an 1863 law that encourages private individuals to file suit when they have evidence of fraud involving government money.

When the government believes a suit has merit, it may take over the litigation. The individuals, or whistleblowers, get a portion of the proceeds if the case is successful.

Since the law was revitalized in 1986, it has been used frequently against military contractors, pharmaceutical companies and hospitals.

Armstrong is prepared to argue that claims over most of the sponsorship money are time-barred, a source close to his legal team said, speaking on condition of anonymity. The sponsorship agreement expired in 2004, and there is a six-year statute of limitations on recovery under a U.S. anti-fraud law, the source said.

The source raised two other arguments that could help Armstrong. First, the sponsorship contract did not contain specific language or promises related to doping.

Second, Armstrong was not in charge of Tailwind Sports, the racing team firm that signed the contract with the Postal Service and that existed before Armstrong joined it.

Luskin is among the most sought-after defense lawyers in Washington. He represented former White House adviser Karl Rove in a case about the leak of a CIA officer's name.