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Contributors to Landis fund contacted by FBI

  • By Neal Rogers
  • Published Jan. 23, 2013
  • Updated Jan. 23, 2013 at 6:51 PM EDT
The FBI has sent this letter to a number of Floyd Fairness Fund donors in recent days.

BOULDER, Colorado (VN) — The Federal Bureau of Investigation (FBI) has reached out to those who contributed to the Floyd Fairness Fund, a fund set up by Floyd Landis during his fight against doping charges stemming from the 2006 Tour de France.

VeloNews has received a copy of an FBI letter, dated January 14, 2013, which identifies those who contributed as “victims of a [federal] crime.”

On August 24, 2012, Landis appeared in a San Diego federal court and admitted defrauding 1,765 individuals who donated money to the Floyd Fairness Fund. He also agreed to repay $478,354 in restitution “as a result of receiving these funds based upon falsely representing to victims that he had not used performance enhancing drugs during his career as a professional cyclist.”

Those donations were raised “though town hall-style meetings, online videos, charity rides, a book, and personal appeals,” the FBI reported, “based, in large part, on his consistent denial of having used PEDs during his professional cycling career.”

The San Diego branch of the FBI posted a summary on its website detailing its case against Landis and his agreement to make restitution.

According to Assistant U.S. Attorneys Phillip L.B. Halpern and Peter J. Mazza, who handled the case, the government agreed to “ultimately dismiss the information filed against Landis in three years, provided he makes restitution to the donors and otherwise lives up to the term of the agreement.”

The FBI’s recent letter to Floyd Fairness Fund donors disclosed little about the state of Landis’ restitution, and read more as a template used for all victims of federal crimes.

However, the first sentence in the letter’s second paragraph — “The case is currently under investigation” — is unclear, as sources have told VeloNews that the case is settled, and that part of that settlement dictated that Landis would be allowed to contact those donors with a letter of contrition, informing them that they could either claim restitution or waive their right.

It is also unknown whether or not Landis has contacted donors, or what his timeframe might be.

“A criminal investigation can be a lengthy undertaking,” the FBI’s January 14 letter reads, “and, for several reasons, we cannot tell you about its progress at this time. But we can do this: We have enclosed a brochure about the FBI’s victim assistance program. The brochure will introduce you to this program and to available FBI assistance for victims. A victim of federal crime is entitled to receive certain services, such as information regarding available emergency medical and social services; available public and private programs for counseling, treatment, and other support; and notice of certain events in the progress of the case. The enclosed brochure will discuss those services and others.”

Calls to the FBI’s Victim Assistance Program went straight to voicemail accompanied by a recorded message claiming that return contact regarding the Floyd Fairness Fund would likely be delayed: “This may take several business days as we are currently receiving a high volume of calls.”

Kelly Thorton, the public affairs coordinator for the U.S. Attorney’s office in San Diego, was unable to comment without further internal review.

Landis spent much of 2006 through 2008 fighting his positive test for exogenous testosterone. He twice unsuccessfully fought charges brought forth by the U.S. Anti-Doping Agency (USADA), first in September 2007, in front of the American Arbitration Association (AAA), and again at a hearing in September 2008 before the Court of Arbitration of Sport (CAS). Landis served a two-year suspension, returning to competition at the 2009 Amgen Tour of California, and he also raced intermittently in 2010.

In May of 2010, during the Amgen Tour of California, Landis blew the lid open on systematic doping at the U.S. Postal Service team, admitting that, throughout his career, he had used testosterone, human growth hormone, insulin, pregnancy hormones, and erythropoietin [EPO] — effectively acknowledging that his Fairness Fund had been fraudulent.

Those allegations launched an 18-month federal investigation into Lance Armstrong and the U.S. Postal team, which was surprisingly shut down on February 3, 2012. That investigation spawned a sporting case by USADA, resulting in a Reasoned Decision document, released October 11, which explained Armstrong’s lifetime ban from competition.

In August of 2012 Landis agreed to repay $478,354 in restitution to “victims” of his Fairness Fund. How Landis, who spent over $2 million on his defense and was unemployed and discredited, would make restitution was unclear.

However, that has changed with information that Landis, filing under the False Claims Act, is suing Armstrong and former U.S. Postal team associates including Thomas Weisel for defrauding the government by violating the sponsorship agreement between the team and the U.S. Postal Service, which reportedly spent over $30 million in sponsorship between 2001 and 2004.

If Landis were to win his suit, he could potentially stand to gain a percentage, up to 25 percent, of three times what the Postal Service spent — roughly $90 million.

New York Daily News first published the sealed 33-page federal whistleblower lawsuit, dated June 10, 2010, last week.

The suit is filed against former U.S. Postal Service management, including Tailwind Sports and Montgomery Sports, owned by wealthy San Francisco financier Weisel, as well as Austin-based Capital Sports & Entertainment, which lists Armstrong, Johan Bruyneel, Bill Stapleton, and Bart Knaggs among its principals.

Landis has declined to comment on either the FBI case or the federal whistleblower case.

If the U.S. Department of Justice were to intervene, which it is reportedly considering, Landis would be entitled to up to 15-25 percent of any money the government recovers, rather than 25-30 percent if he pursues the case without the government’s resources.

The DOJ, which shut down its own 18-month investigation into Armstrong on the Friday evening of the 2012 Super Bowl weekend, has reportedly asked for an extension to join Landis’ suit; the original deadline was January 14, the same date as both the FBI’s crime-victims letter and Armstrong’s televised admission with Oprah Winfrey.

CBS News reported last week that government officials had rejected an Armstrong offer to repay $5 million in restitution and cooperate with investigators as a witness.

Given Armstrong’s admission, he can now only hope to settle the lawsuit quietly rather than face an expensive court case. And it’s entirely possible that some of that money may ultimately be applied towards those who donated to Landis’ Fairness Fund.

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Neal Rogers

Neal Rogers

Neal Rogers is editor in chief of Velo magazine and VeloNews.com. An interest in all things rock 'n' roll led him into music journalism while attending UC Santa Cruz, on the central coast of California. After several post-grad years spent waiting tables, surfing, and mountain biking, he moved to San Francisco, working as a bike messenger, and at a software startup. He moved to Boulder, Colorado, in 2001, taking an editorial internship at VeloNews. He never left. When not traveling the world covering races, he can be found riding his bike, skiing, or attending a concert.

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