Separating issues here - cheating from fraud - I find it hard to see how USPS could ever argue fraud.
Cycling sponsors pay for publicity - it is them who decide that publicity is worth money and so put a value of spend against promtion to justify the business case -, and in return they got publicity in spades.
It is hard to argue that if the team had pedalled along at the back pain agua they would have got more publicity or better publicity than they did.
They were paying for promotion and got just about the maximum promotion they could have got for their money.
So it seems to me the fraud thing - essentially taking money on false pretences - is far fetched at a level of common sense.
Considering the Festina affair the previous year and numerous doping scandals since it is also hard for USPS to argue that they would not have got involved had there been a suspicion of doping. The sport image has always been tarnished by doping.
So from a legal perspective it would be interesting to hear an explanation of the basis of the case, or indeed, the fact of Birotte dropping it, and the lack of DOJ enjoining the qui tam suit probably tells its own story.
They may have been able to prove he was cheating, they may have shown money went all sorts of places, but that is not enough - what USPS were paying for was promotion and they got it.