Two Former Cognizant Executives Charged in Bribery Probe



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Two train executives of outsourcing-operations company

            Cognizant Technology Solutions
Corp.

They have been brought to the fore by the United States.

The Teaneck, N.J.-based company also agreed to pay $ 25 million to settle with U.S. authorities.

Gordon Coburn, the company's former president, and Steven Schwartz, its former chief legal officer, authorized a $ 2 million bribe to at least one government official in India to secure 17,000 employees, prosecutors said.

"Bribery to further corporate goals is a long-term success story," said Charles E. Cain, chief of the Securities and Exchange Commission's antiforeign-bribery unit.

Cognizant has more than 250,000 employees globally, more than half of whom work in various locations in India. Cognizant helps companies outsource their information technology and other business processes. Earlier this month, the company reported revenue of $ 16 billion in 2018, up 8.9% from the prior year.

To conceal Cognizant's role in the bribery scheme, Messrs. Coburn and Schwartz, and others, agreed to a construction company to secure the permit, prosecutors said. The construction company would pay the bribe, and it would be cheaper to go into the future, located in Chennai, India, prosecutors said.

The construction company received the permit in late June 2014; between March 2015 and January 2016 Cognizant issued several payments to the construction company, including a reimbursement for the bribe and related expenses, according to prosecutors.

"The allegations … describe a sophisticated international bribery scheme authorized and concealed by C-suite executives of a publicly traded multinational company," said Brian A. Benczkowski, an assistant attorney general, in a statement.

Hank Walther, an attorney for Mr. Coburn, said he was disappointed that U.S. "Mr. Coburn intends to vigorously fight all charges, "he said.

Roberto Finzi, a lawyer for Mr. Schwartz, said his client was innocent and did not do anything wrong. "He will fight these false and unfair charges," he said.

Messrs. Coburn and Schwartz were in a 12-count indictment Thursday by a federal grand jury in New Jersey, prosecutors said. They have had three counts of violating the Foreign Corrupt Practices Act, and a number of circumventing accounting controls and a conspiracy count.

The FCPA, which is jointly enforced by the Justice Department and the Securities and Exchange Commission, prohibits the use of bribes to government officials to keep business.

The two men were also sued in a civil complaint by the SEC, which seeks permanent injunctions, monetary penalties and officer-and-director-bans against them.

Prosecutors on Friday also announced that they declined to prosecute the company, quoting Cognizant's self-disclosure of allegations, and its cooperation and remediation. Cognizant agreed to pay $ 19 million in disgorgement and a $ 6 million civil to the SEC to resolve the agency's claims.

Cognizant said it was pleased to resolve the case, citing its voluntary self-disclosure, internal investigation and cooperation. "It is important to note that this does not involve our work with customers," said Francisco D'Souza, the company's vice chairman and CEO, in a statement.

Shares in Cognizant traded at $ 73.27 on Friday, a 0.21% increase over Thursday's closing price, according to FactSet.

Write to Samuel Rubenfeld at [email protected] and Dave Michaels at [email protected]

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