Lance Armstrong will be sued by Justice Department to recover funds

Government will take over lawsuit against disgraced cyclist in attempt to recoup millions from US Postal Service sponsorship

The US Justice Department has joined a lawsuit against Lance Armstrong, in an attempt to recover more than $30m in sponsorship money that the US Postal Service paid to help the disgraced cyclist’s team to compete.

The suit, which alleges that the seven-time Tour de France winner concealed his use of performance-enhancing drugs and defrauded his sponsor, was filed in 2010 by one of Armstrong’s former team-mates, Floyd Landis.

In adding its name to the lawsuit, the Department of Justice said that $31m of taxpayers money was handed over on a “contractual promise to play fair and abide by the rules”. But team riders including Armstrong “knowingly” violated the agreement with the US Postal Service (USPS) by taking banned substances, according to government lawyers.

It is now seeking damages from Armstrong, his team manager Johan Bruyneel and holding company Tailwind Sports.

“The Postal Service contract with Tailwind required the team to enter cycling races, wear the Postal Service logo, and follow the rules banning performance enhancing substances – rules that Lance Armstrong has now admitted he violated,” Stuart Delery, principal deputy assistant attorney general for the civil division of the Department of Justice, said.

Armstrong’s lawyer, Robert Luskin, said in a statement that negotiations with the government over the lawsuit had fallen apart “because we disagree about whether the Postal Service was damaged”.

Lawyers for the Justice Department and Armstrong had been discussing a settlement for some time. On Friday, the Associated Press quoted a source saying the two sides were “tens of millions of dollars apart” on how much Armstrong should repay.

Luskin said that the Postal Service’s own studies “show that the service benefited tremendously from its sponsorship – benefits totalling more than $100m.”

But Ronald Machen, US attorney for the District of Columbia, said that the postal services’ sponsorship was now “unfairly associated” with a cheating scandal that has been described as “the most sophisticated, professionalized, and successful doping program that sport has ever seen”.

Armstrong admitted to doping last month, in a confessional interview with the chat-show host Oprah Winfrey.

Having already been stripped of his titles and sponsorship deals, the decision to admit doping opened him up to several multi-million dollar lawsuits. A British newspaper, the Sunday Times, has indicated that it is considering a move to be repaid an undisclosed sum that it was forced to pay in damages after alleging that Armstrong was doping. A Texan sports marketing firm is also suing to recover funds paid to the cyclist.

The Department of Justice cited the Oprah Winfrey show in its statement on the latest development.

During the interview, Armstrong “contradicted his earlier denials and admitted that he used banned substances and methods throughout his career, starting in the mid-1990s”, it said. As such it was joining the legal action, filed by Landis, under the False Claims Act.

Landis won the 2006 Tour de France for the Phonak team but was subsequently stripped of the title after testing positive for testosterone.