INSUBCONTINENT EXCLUSIVE:
charges, as Department of Justice filed criminal cases against two if its former top executives
The two former executives have been charged for their roles in facilitating the payment of millions of dollars in bribe to an Indian
government official, the Security and Exchange Commission (SEC) said.Cognizant has agreed to pay $25 million to settle charges that it
violated the Foreign Corrupt Practices Act (FCPA), the SEC said.The complaint alleges that in 2014, a senior Tamil Nadu official demanded a
$2 million bribe from the construction firm responsible for building Cognizant''s 2.7 million square foot campus in Chennai.As alleged in
the complaint, Cognizant''s President Gordon Coburn and Chief Legal Officer Steven E Schwartz authorised the contractor to pay the bribe
and directed their subordinates to conceal the bribe by doctoring the contractor''s change orders
The SEC also alleges that Cognizant authorised the construction firm to make two additional bribes totaling more than $1.6 million.Cognizant
allegedly used sham change order requests to conceal the payments it made to reimburse the firm, SEC said
The SEC charged Coburn and Schwartz with violating anti-bribery, books and records, and internal accounting controls provisions of the
The SEC is seeking permanent injunctions, monetary penalties, and officer-and-director bars against Coburn and Schwartz.In a separate
statement, the Department of Justice said Gordon Coburn, 55, and Steven Schwartz, 51, have been charged in a 12-count indictment with one
count of conspiracy to violate the FCPA, three counts of violating the FCPA, seven counts of falsifying books and records, and one count of
circumventing and failing to implement internal accounting controls.The allegations in the indictment filed on Thursday describe a
sophisticated international bribery scheme authorised and concealed by C-suite executives of a publicly-traded multinational company, said
Assistant Attorney General Brian Benczkowski.According to the indictment, in April 2014, Coburn and Schwartz allegedly authorised an
unlawful payment of approximately $2 million to one or more foreign government officials in India to secure and obtain a necessary permit to
open a new office campus.To conceal Cognizant''s involvement in the scheme, Coburn, Schwartz and others allegedly agreed that a
third-party construction company would obtain the permit by making the illegal bribe payment and that Cognizant would reimburse the
construction company through phony construction invoices at the end of the project.The indictment further alleges that in June 2014, after
the co-conspirators agreed that the construction company would make the bribe payment on behalf of Cognizant, the construction company
secured the necessary government order for Cognizant to obtain the permit, allowing Cognizant to complete the development of the office
campus and avoid millions of dollars in costs.Months later, the co-conspirators are alleged to have knowingly caused Cognizant to funnel
over $2 million to the construction company disguised as payment for cost overruns on the office campus when they knew that the actual
purpose of the payment was to reimburse the construction company for the bribe payment.According to the indictment, as Coburn, Schwartz and
others had previously agreed, they hid the bribe reimbursement payment within a series of line items in a construction change order request
to be paid to the construction company, thereby concealing the true nature and purpose of the reimbursement, falsifying Cognizant''s books
and records, and circumventing and failing to implement its internal controls.In a statement, Cognizant said it has resolved the previously
disclosed investigations by the Department of Justice and SEC into whether payments relating to permits and licenses for certain real estate
facilities in India violated the US FCPA."We are pleased to reach these resolutions with the US Department of Justice and the US Securities
With today''s announcements, we''ve taken a major step forward in putting this behind us," said Francisco D''Souza, vice chairman and CEO
of Cognizant.D''Souza said Cognizant undertook a comprehensive internal investigation under the oversight of the Audit Committee of the
Board of Directors, with the assistance of outside counsel."We have also made further enhancements to our compliance processes, procedures
It is important to note that this entire matter did not involve our work with clients or affect our ability to provide the quality services
our clients expect from us," he said in a statement.The Company, it said, settled with the SEC by consenting to the entry of an
In total, the resolutions require it to pay approximately $28 million to the DOJ and SEC."This amount is consistent with the accrual
