Cognizant counters indicted executive’s spying charge

BENGALURU: Five years after a bribery scandal roiled Cognizant, the case continues to be an irritant for the Nasdaqlisted IT company. One of the two top executives indicted in the case, the former legal officer Steven Schwartz, has charged Cognizant with spying on the defence camp. Cognizant has countered the allegation in a New Jersey court that there has never been any such intrusion.
A Wall Street Journal article said in a report on Tuesday that Schwartz’s lawyers said Cognizant hired private investigators to interview employees of a law firm representing Schwartz and gathered information from his own lead investigator, who they say was “acting as a spy in the defence camp”.
According to the court filing, Ricardo Solano, partner (litigation) in law firm Friedman Kaplan and who represents Cognizant, told the US district judge, “At all times during its investigation and since, Cognizant and its counsel have acted professionally and appropriately, and there has certainly never been an intrusion ‘into the defence camp’, as Schwartz now claims…Accordingly, although the motion is directed at the government, we respectfully request the opportunity to respond so that the court may have a complete record of the underlying facts before considering the unusual — and unwarranted — relief that Schwartz is seeking.” TOI has seen a copy of the filing.

In 2019, Schwartz filed a case against Cognizant in a US court for withholding his lawyers’ fees to defend himself against a pending federal indictment in a bribery charge for violating the Foreign Corrupt Practices Act (FCPA). In the same year, the US authorities had filed an indictment against Schwartz and former president Gordon Coburn in the New Jersey district court.
The original case, which came to the fore under the previous leadership when it instituted an internal inquiry, alleged Coburn and Schwartz channelled payments to L&T, the construction company responsible for Cognizant’s Chennai campus. It was alleged that to disguise Cognizant’s repayment to L&T of the bribes the latter paid to government officials, Schwartz and Coburn agreed that L&T would submit many fraudulent change order requests at the end of the project totalling $2 million.
In 2016, Cognizant reported itself to the US SEC and the Justice Department, and it was made to pay $25 million in penalties. Schwartz and Coburn left Cognizant the same year and were indicted in February 2019 for conspiracy to violate the FCPA and falsifying books and records.

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