Return to Sender? $32 Million Postal Service Sponsorship Could Serve as Measure of Damages in Floyd Landis’s False Claims Act Suit

Last week, ESPN reported, based on documents uncovered through a Freedom of Information Act (“FOIA”) request, that Tailwind Sports, a San Francisco-based sports management company, was paid nearly $32 million between 2001 and 2004 to run Lance Armstrong’s United States Postal Service (“USPS”) cycling team.  The figure is significant to the False Claims Act suit filed by former Armstrong teammate Floyd Landis, which alleges that Tailwind lied to the USPS regarding the cycling team’s systematic use of performance-enhancing drugs.  Under the False Claims Act, a finding of liability carries with it an award of treble damages, meaning that Landis’s suit could result in nearly $100 million in damages for Tailwind, Armstrong (who became a co-owner of the company shortly after it was established), and Tailwind’s founder, financier Thom Weisel.

Landis essentially alleges that Tailwind engaged in a fundamental form of financial fraud – misrepresenting the truth to the USPS in order to obtain money.  If Landis can prove that Tailwind attempted to hide pervasive doping on the cycling team in order to receive $32 million for running and managing the team, “the company may very well have exposure under the False Claims Act,” said Paul Scott, a former Department of Justice trial attorney who now specializes in False Claims Act litigation.

Armstrong, of course, has steadfastly denied the use of performance-enhancing drugs.  Landis is currently awaiting the government’s decision as to whether it will intervene and take the lead in pursuing the claims against Tailwind, Armstrong and Weisel.

For more information see:  http://blogs.sfweekly.com/thesnitch/2011/01/usps_paid_sf_lance_armstrong_f.php#