The Justice Department filed paperwork in the US federal court on Friday to join the lawsuit against Armstrong, which alleges he knowingly defrauded the publicly funded US Postal Service team by breaking cycling rules and taking banned substances.
"Lance Armstrong and his cycling team took more than $30 million (22.79 million euros) from the US Postal Service based on their contractual promise to play fair and abide by the rules - including the rules against doping," said Ronald Machen, US Attorney for the District of Columbia, who is handling the case.
Recouping 'tens of millions'
The US Anti-Doping Agency stripped Armstrong, 41, of his seven Tour de France titles last year after uncovering evidence, with testimony from 26 witnesses, that he was at the heart of a major doping conspiracy. In a January television interview the former cyclist, who was also given a life ban from the sport, admitted the doping accusations against him were true.
The suit also targets team-owned Tailwind Sports LLC and team manager Johan Bruyneel. Armstrong and his teammates from Tailwind Sports competed under the Postal Service logo from 1996 through 2004. The team won seven consecutive Tour de France titles from 1999-2005.
"This lawsuit is designed to help the Postal Service recoup the tens of millions of dollars it paid out to the Tailwind cycling team based on years of broken promises," said Machen.
"The Postal Service has now seen its sponsorship unfairly associated with what has been described as 'the most sophisticated, professionalized, and successful doping program that sport has ever seen,'" Machen added.
The whistleblower suit was first filed in 2010 by former teammate Floyd Landis, who alleges that Armstrong twice gave him banned hormones and that he witnessed his former team leader store and re-inject his own blood.
Landis himself admitted to doping and after being stripped of his 2006 Tour de France title, filed his suit under the False Claims Act, an 1863 law that encourages private individuals to file suit when they have evidence of fraud involving government money.
"I had come to a point in my life where I decided that I had to tell the truth for the sake of my conscience," said Landis on Friday in a statement released by his lawyer.
Armstrong plans to contest the suit because the Postal Service was not actually damaged, said his lawyer, Robert Luskin.
"The Postal Service's own studies show that the service benefited tremendously from its sponsorship - benefits totaling more than $100 million," Luskin said in a statement.
The Justice Department will file its formal complaint concerning the current case within 60 days. Armstrong was previously the subject of a two-year federal grand jury investigation that was dropped a year ago without indictment.
dr/jr (AP, AFP, Reuters, dpa)