Former Cognizant Chief Legal Officer sues firm for non-payment of legal fees

Erstwhile Cognizant executive Vice President and Chief Legal Officer Steven Schwartz has filed a case against Cognizant in a United States (US) court for withholding his lawyers’ fees to defend himself against a pending federal indictment in a bribery charge for violation of Foreign Corrupt Practices Act (FCPA).

Schwartz joined Cognizant in 2001 and resigned in 2016. He alleged that Cognizant has wrongfully refused to provide him with the advancement that is due to him. In the lawsuit, Schwartz said he is entitled to advancement of reasonable attorneys’ fees and expenses, together with pre-judgment and post-judgment interest, incurred, and to be incurred, relating to his defense of the proceedings. Sources from Cognizant stated that Schwartz had hired three separate law firms to defend himself against a pending federal indictment.

According to Schwartz, the company is required to advance all expenses that are properly demanded and certified.

Last year, the US authorities had filed an indictment against Schwartz and former President Gordon Coburn in the US District Court, New Jersey.

A group of investors had filed a lawsuit that highlighted two of Cognizant’s former top executives — Coburn and Schwartz in relation to Cognizant’s 2.7-million-sqft KITS campus in Chennai. The lawsuit alleged that Coburn and Schwartz channeled payments to the construction company responsible constructing for the KITS campus.

Allegedly, a senior government official of the state of Tamil Nadu demanded a $2 million bribe from the construction firm responsible for building Cognizant’s 2.7 million square foot campus in Chennai (KITS). It was also alleged in the law suit that in order to disguise Cognizant’s repayment to the construction company of the bribes which the construction company paid to government officials, Schwartz and Coburn agreed that the construction company would submit many fraudulent change-order requests at the end of the project, amounting to $2 million.

As alleged in the complaint, Gordon Coburn, Cognizant’s President, and Steven E. Schwartz, the company’s Chief Legal Officer, authorized the contractor to pay the bribe, and directed their subordinates to conceal the bribe by doctoring the contractor’s change orders. Cognizant allegedly authorized 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.