The U.S. Department of Justice has decided to join a whistleblower lawsuit against former cyclist Lance Armstrong, according to people briefed on the matter.
The lawsuit, filed by Mr. Armstrong's former teammate Floyd Landis, alleges that Mr. Armstrong and others on his former cycling team defrauded the U.S. government when they took sponsorship dollars from the U.S. Postal Service with the understanding that there would be no use of performance-enhancing drugs on the team.
Under the federal False Claims Act, citizens can sue for alleged fraud against the government and receive a reward of as much as a third of any money recovered by the government. The Department of Justice can choose to join any false-claims lawsuit, increasing its chance of success.
The government is expected to file papers on the matter Friday in federal court in Washington, where government lawyers and Mr. Armstrong have engaged in a two-year legal battle over access to evidence.
Last month, after he was stripped of his seven Tour de France titles and accused of operating a sophisticated team doping operation, Mr. Armstrong admitted on the Oprah Winfrey Network that he had cheated throughout his career.
The whistleblower lawsuit, which is still under seal and was first revealed by The Wall Street Journal in 2010, also accuses Mr. Armstrong's former team owner, San Francisco investment banker Thomas Weisel, and his longtime agent, Bill Stapleton.
If found to have violated the False Claims Act, Mr. Armstrong and others named in the suit would be liable for as much as triple the amount of the sponsorship, which was more than $30 million between 1999 and 2004, the years in which Mr. Armstrong won the Tour de France in a U.S. Postal Service jersey.
Mr. Armstrong has argued, through representatives and attorneys, that the whistleblower suit has no merit because the U.S. Postal Service derived a marketing benefit from the publicity of Mr. Armstrong winning the Tour de France. Mr. Landis declined to comment Friday.
However, whistleblower experts say any marketing benefit to the U.S. Postal Service is relevant only as a mitigating factor in the damages that might be awarded to the government.
For Mr. Landis and the Department of Justice to prevail in the suit, they have to prove only that team managers signed contracts with the U.S. Postal Service that they knew, or should have known, were false, whistleblower lawyers say.
Since the suit was filed in the spring of 2010, the Department of Justice has been investigating the claims in the suit. It has been interviewing witnesses and has subpoenaed documents from Messrs. Armstrong and Weisel.
According to people briefed on the matter, top Justice Department officials had a meeting Thursday afternoon to decide whether to join the suit. Ultimately, the final decision was Attorney General Eric Holder's, but there was general agreement to proceed.
Mr. Armstrong had also been the subject of a two-year criminal investigation. Los Angeles U.S. Attorney Andre Birotte closed that investigation without charges in February.