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Landis pleads not guilty to fraud, agrees to repay donors

Associated Press

8/24/2012 3:35:16 PM

SAN DIEGO -- Cyclist Floyd Landis agreed Friday to repay donors nearly a half-million dollars that he raised to challenge doping allegations in an agreement with federal prosecutors that may spare him criminal charges of lying to supporters about his drug use.

If Landis fails to repay them in three years, federal prosecutors may pursue a single count of wire fraud, exposing him to up to 20 years in prison if convicted.

Phillip Halpern, an assistant U.S. attorney, persuaded a judge to release Landis without bail following the federal grand jury investigation.

"I think it's safe to say Mr. Landis has known about these proceedings for months, if not over a year. Mr. Landis has always been extremely co-operative," Halpern told U.S. Magistrate Judge Jan Alder.

As part of his "deferred prosecution" agreement, Landis admitted defrauding 1,765 donors out of $478,354 -- an amount he will fully repay. His attorney, Leo Cunningham, pleaded not guilty on his client's behalf and prosecutors immediately agreed not to pursue charges while Landis reimburses supporters.

Landis, 36, apologized to his donors as he left the federal building.

"I can never undo what happened," he told reporters. "I can never undo having lied to people but if, in some small way, making restitution helps them to forgive me, then that's a small step in the right direction."

Landis, 36, won the Tour de France in 2006 but was stripped of the title after an arbitration panel upheld the results of a positive test for synthetic testosterone. After strenuous denials and a protracted fight in courts around the world, Landis acknowledged using performance-enhancing substances and has alleged widespread doping on his U.S. Postal Service team, which included seven-time Tour winner Lance Armstrong.

The U.S. Anti-Doping Agency on Friday stripped Armstrong of his record seven Tour de France titles and banned him for life from the sport after concluding he used banned substances. Armstrong, whose victories after his comeback from cancer helped him transcend sports, said Thursday that he chose to not pursue arbitration with the agency. It was Armstrong's last option in his bitter fight with USADA.

The action leaves Greg LeMond as the only American to win the race.

Landis avoided reporters' questions about Armstrong Friday, saying only, "I really don't know what the solution is for the sport of cycling. That's not my issue anymore."

Halpern, a weekend warrior cyclist himself, told reporters the restitution represents "every penny" Landis raised on the false pretense that he didn't take performance-enhancing drugs. Donors contributed as much as $50,000 each. He credited Landis for coming clean in 2010 and helping expose doping in cycling.

"This agreement reflects that," he said.

The FBI-led probe into whether he had fraudulently solicited donations for his legal defence began in 2010, authorities said. He spent more than $2 million, largely raised through his Floyd Fairness Fund in a failed effort to avoid a competition ban from USADA.

Landis created the defence fund in 2007 and raised money through town hall-style meetings, online videos, charity events, personal appearances and a book, "Positively False: The Real Story of How I Won the Tour de France," according to a summary of the charges.

The 14-page agreement with prosecutors caps restitution at 50 per cent of Landis' annual income, if he makes at least $200,000. Payments would be limited to 5 per cent of his annual income if he makes less than $50,000.

Landis appeared attentive and relaxed during Friday's 15-minute hearing, delivering crisp answers. At one point, the judge asked if he reviewed the agreement.

"Yes, many times," Landis replied.

The Court of Arbitration for Sport ruled in 2008 that Landis doped before a stunning victory in Stage 17 of the 2006 Tour. He was 8 minutes behind Spain's Oscar Pereiro to start that day and trimmed the Spaniard's lead to a mere 30 seconds before eventually prevailing.

"The best performance in the modern history of the Tour," former Tour director Jean-Marie Leblanc said at the time.

Landis' samples taken after that stage revealed a testosterone/epitestosterone ratio of 11:1 -- nearly three times the 4:1 limit. Eventually, he became the first Tour champion to be stripped of his title.

In January 2011, the disgraced cyclist announced his retirement from professional racing, saying the battle to fix the sport's drug-tainted image is "not my fight." Landis said then that he had been unable to find a salaried position in cycling since May 2010, when he publicly alleged widespread drug use in cycling, specifically identifying Armstrong.