The Federal False Claims Act, also known as qui tam lawsuits, have been around since the Civil War. In Fact, the False Claims Act was passed to deal with the many fraudulent government purchases during the Civil War. The Federal government was defrauded many times by contractors during the Civil War. The act allows a person who first reports fraud on the government to receive 30% of any money recovered. The trick, so I am told, is to get the U.S. Attorney to join in the lawsuit. One can expect the U.S. Attorney or the Department of Justice to join only the strongest qui tam lawsuits.
Department of Justice has indeed joined in Floyd Landis’ lawsuit for fraud against Lance Armstrong for defrauding the Postal Service. The suit alleges that Mr. Armstrong defrauded the government when he accepted payments for riding on their cycle team. According to the DOJ Complaint, team officials assured the Postal Service for years that the cycle team was not doping.
The Postal Service paid $40 million to be the sponsor and paid Lance Armstrong $17 million. But, under the False Claims Act, the government and Floyd Landis must also show that the government was harmed. According to the Armstrong response to the lawsuit, the Postal Service gained some $139 million due to the Armstrong brand. The defense cites the Postal Service’s own internal study. See CBS news report.
So, the extent of the harm to the U.S. government could be a problem. But, yes, when you get the US Attorney involved, the lawsuit has truly begun.