Lance Armstrong co-defendants reach $158K settlement in federal case

Lance Armstrong’s longtime agent and business partner have agreed to pay $158,000 to get out of a $100 million federal lawsuit scheduled to go to trial against Armstrong in November.

U.S. District Judge Christopher Cooper signed off on the settlement Wednesday, ordering the dismissal of Bill Stapleton, Armstrong’s longtime agent, and Barton Knaggs, Armstrong’s longtime friend and business partner.

The agreement was part of a deal with former cyclist Floyd Landis, who sued them and Armstrong on behalf of the United States government in 2010. Their dismissal clears the deck for Landis and the federal government to go after Armstrong alone in the upcoming trial in Washington, D.C.  

“Suffice it say, the settlement was reasonable under all the circumstances,” Landis' attorney, Paul Scott, told USA TODAY Sports Thursday. “It allows us to focus our efforts and attention now on the upcoming trial of the central responsible party in the case.”

In exchange for being dismissed from the case, Stapleton, Knaggs and their company, Capital Sports & Entertainment, will pay $68,000 to the federal government and $90,000 to the law firm of Scott.

Their involvement in the case dates to when Landis filed a civil fraud complaint against Armstrong, Stapleton and Knaggs in federal court, accusing them of ripping off the U.S. Postal Service as part of a sponsorship deal with Armstrong's cycling team. The federal government joined Landis’ case in 2013 and is working with Landis as a government whistleblower against Armstrong. Under the False Claims Act, Armstrong could be on the hook for triple the $32.3 million paid by the Postal Service to sponsor his team from 2000 to 2004 — nearly $100 million.

The settlement streamlines the case but is paltry in comparison to a different settlement Landis reached with Stapleton and Knaggs in late 2014. Back then, Stapleton, Knaggs and their company agreed to pay $500,000 to the federal government and $100,000 to Scott’s law firm in exchange for being dismissed from the suit.

But that settlement was ultimately rejected by Judge Cooper in 2015 because the federal government objected to it, apparently in an effort to get more information out of Stapleton and Knaggs before trial.

This time, the federal government approved of the settlement, and Cooper has dismissed Stapleton, Knaggs and Capital Sports & Entertainment, the company they owned in Austin, Texas.

"My clients are pleased to be out of the case," said Marc Harris, an attorney in Los Angeles who represented Stapleton and Knaggs. "It has been a very long road for them. Even with several rulings in our favor that continually whittled down the case against them, the government withheld its consent to have them dismissed from the case.  We are gratified that we have finally resolved the matter."

The U.S. Justice Department declined comment on the settlement through a spokeswoman.

The government is suing Armstrong on behalf of the Postal Service, alleging that Armstrong’s cycling team violated its sponsorship contract with the Postal Service by using performance-enhancing drugs and blood transfusions to cheat in races. It argues the Postal Service would not have paid the cycling team if it had known about the doping and says that Armstrong concealed the violations to keep getting paid, effectively causing false claims to be submitted to the government.

Stapleton and Knaggs owned Capital Sports & Entertainment and were accused by Landis of conspiring with Armstrong to have false claims submitted to the Postal Service for payment.

After more than a decade of denials, Armstrong confessed to doping in 2013, shortly before the government joined Landis’ case. After years of lying about it himself, Landis also confessed to doping and was a teammate of Armstrong’s on the same Postal Service team. Now both are enemies on opposite sides of this case. As the official whistleblower in this case, Landis stands to get up to 25% of the damages if the case succeeds.

Unlike Landis, the government did not name Stapleton and Knaggs as defendants in its separate but parallel complaint against Armstrong in 2013. Judge Cooper still ruled the government had veto power over any proposed settlement in the joint case.  The government consented to Landis’ settlement with Stapleton and Knaggs on Monday.

In his defense, Armstrong’s attorneys have not disputed the doping but say the Postal Service didn’t suffer damages from it and instead profited from the sponsorship while Armstrong was wearing the USPS jersey at the height of his fame and success.

© 2017 USATODAY.COM


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