The Justice Department has joined a lawsuit against disgraced cyclist Lance Armstrong that alleges the former, seven-time Tour de France champion concealed his use of performance-enhancing drugs and defrauded his long-time sponsor, the U.S. Postal Service, Armstrong's lawyers said Friday.
The suit the Justice Department is joining was filed in 2010 by former teammate Floyd Landis, who was stripped of his 2006 Tour de France title for doping.
"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," Armstrong attorney Robert Luskin said in a statement to news outlets, including CBS News.
Settlement discussions had been under way between the Justice Department and Armstrong's lawyers. A person familiar with the negotiations told The Associated Press the two sides are tens of millions of dollars apart on how much Armstrong should pay to settle the case. The person spoke on condition of anonymity because the source was not authorized to speak on the record about the private talks.
Last month, "CBS Evening News" anchor Scott Pelley reported that Armstrong offered to pay more than $5 million to the government to compensate for the fraud he allegedly committed against the Postal Service.
Armstrong also offered to be a cooperating witness in a federal investigation, Pelley reported. The Justice Department rejected both offers as inadequate.
The Landis lawsuit was filed under seal, but it will be unsealed with the Justice Department decision to join or, in essence, take over the case.
Armstrong was the subject of a two-year federal grand jury investigation that the Justice Department dropped a year ago without an indictment.
Throughout his career, Armstrong always denied drug use, but he confessed to having done so in an interview last month.
In October, the U.S. Anti-Doping Agency released a report that included affidavits from 11 of Armstrong's former teammates. These affidavits detailed how the teammates were supplied with EPO by Armstrong and saw him inject, and how they were pressured to dope and bullied by Armstrong and Johan Bruyneel, the team manager. The cycling world's governing body then stripped Armstrong of the seven Tour de France titles he won from 1999 to 2005.
Last month, the head of USADA lobbied Attorney General Eric Holder for the Justice Department to join the lawsuit against Armstrong. USADA chief executive Travis Tygart has called the doping by Armstrong and the Postal Service teams a "massive economic fraud."
Under the False Claims Act, citizens can act as whistle-blowers and sue to recover money they believe was obtained through fraud against the federal government. These suits remain under seal until the Justice Department decides whether it thinks there is enough merit in the case to take it over. The private whistle-blower receives a percentage of any money ultimately recovered.
Armstrong and USADA officials talked on and off over a couple of months about the terms under which the cyclist might sit down for a long interview to tell all he knows about doping in cycling, but Armstrong said he would not cooperate.
A person familiar with discussions between Armstrong and USADA, who spoke to The Associated Press on condition of anonymity because the discussions were private, said among the topics was how much protection USADA could provide Armstrong in the whistle-blower case and against possible criminal action. The cyclist and his attorneys ultimately were not satisfied with USADA's offer, the person said.
In commenting Wednesday on Armstrong's refusal to talk, Tygart said that, "over the last few weeks he has led us to believe that he wanted to come in and assist USADA but was worried of potential criminal and civil liability if he did so."