US Moves to Drop Overseas Corruption Case After Trump Order (1)

The Justice Department is moving to drop an overseas bribery case against two former tech executives, in its first retreat from a prosecution targeting foreign corruption since President Donald Trump paused enforcement of a US anti-bribery law.

The decision was revealed Wednesday in a two-page filingsigned by Alina Habba, the former Trump defense attorney whom the president on March 24 tapped as the acting US attorney for New Jersey.

“After consultation with the Office of Attorney General, the government hereby moves to dismiss this matter,” Habba said in a motion in the US District Court for the District of New Jersey. “The government’s motion is based on the recent assessment of the executive order’s application to this matter.”

The step marks a significant reversal for the Justice Department, which had given prosecutors the green light in February to bring the case to trial despite the Trump order. Prosecutors had indicted Gordon Coburn and Steven Schwartz, former executives at the New Jersey-headquartered IT firm Cognizant Technology Solutions Corp., and charged them with approving a $2 million payoff to government officials in India to secure a construction permit for a new office building in the country.

The planned dismissal will likely be seized on by lawyers for other defendants facing ongoing prosecutions under the Foreign Corrupt Practices Act, a 1977 law that makes it illegal for a company or person with links to the US to make payments to foreign officials in order to win business overseas.

Trump has complained about the law, and in a Feb. 10 executive order claimed that “overexpansive” enforcement can hurt “American economic competitiveness and, therefore, national security.”

The order directed Attorney General Pam Bondi to review existing FCPA investigations and cases and to pause new actions until new enforcement guidelines are issued. The department has since said that court cases targeting alleged bribery of officials in countries including Egypt and Honduras are also now under review.

Coburn, Cognizant’s former president, and Schwartz, the company’s former top attorney, had pleaded not guilty to the charges, which were first brought in 2019 during the first Trump administration.

The Justice Department’s Criminal Division prosecuted the case in tandem with lawyers from the New Jersey US Attorney’s office. Habba, the lone signature on the Wednesday motion, didn’t specify why the Justice Department no longer will pursue the matter, only noting that it stemmed from a review in accordance with Trump’s order. She added that “further prosecution” is not in the government’s interest.

Judge Michael Farbiarz, a Biden appointee, is overseeing the case and will have ultimate authority over whether the case is closed.

James Loonam, a Jones Day attorney representing Coburn, declined to comment. The Justice Department and a spokesman for Schwartz didn’t immediately return requests for comment.

FCPA Reversal

The Justice Department’s move to drop the Cognizant case highlights its shifting priorities and tentative decisionmaking in the first two months of Trump’s second term.

Associate deputy Attorney General Aakash Singh initially told officials in the Criminal Division to continue pursuing the case. After consulting with Bondi’s office, “it is our belief this does not run afoul” of the executive order, Singh said, according to an email seen by Bloomberg Law.

But John Giordano, who became acting head of the New Jersey US Attorney’s office on March 3, asked the court to delay a March trial start date in order to conduct his own review. The court ultimately granted him one month to perform an evaluation and re-scheduled a trial for April 7.

Trump then last week tapped Habba to replace Giordano as New Jersey’s interim chief federal prosecutor, and Giordano left his post without giving the court any word on the status of his evaluation.

The Justice Department has devoted significant resources to foreign bribery enforcement in recent decades, with cases targeting US firms such as Goldman Sachs Group Inc. leading to billion-dollar settlements. In November 2024, prosecutors in New York charged Gautam Adani, India’s most powerful businessman, with a vast bribery scheme in India to secure solar energy contracts.

Such cases, which can target both US companies and foreign corporations with certain ties to US markets, are expected to get a reduced focus in the coming years as Trump Justice Department appointees devote more attention to areas including immigration and drug trafficking enforcement.

Bondi also issued a memo shortly after her arrival saying that the department would narrow its foreign corruption enforcement to cases that facilitate the criminal operations of cartels and transnational criminal organizations.