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August 18, 2019Cart

Business

by Fairfield County Business Journal
by FCBJ

Two indicted in $5.8M tobacco tax fraud scheme

A federal grand jury in Bridgeport has returned a 13-count indictment against two tobacco wholesalers who are charged with defrauding the state of approximately $5.8 million in taxes due on tobacco products imported into the state.

Pavan Vaswani, who operated Bridgeport-based KDV Discounts LLC, is charged with filing false tax forms with the Connecticut Department of Revenue Services that underreported his taxes due. Rishi Malik, who previously ran Connecticut Discounts LLC in Bridgeport before selling it to Vaswani in 2012, is charged with conspiring with Vaswani to form the Pennsylvania company Discount Deals with the purpose of acquiring smokeless tobacco products that were imported into Connecticut without payment of taxes.

The Jan. 10 indictment charges both men with one count of conspiracy to commit wire fraud and to violate the Contraband Cigarette Trafficking Act, an offense that carries a maximum term of imprisonment of five years. The indictment also charges Vaswani with 12 counts and Malik with four counts of wire fraud, an offense that carries a maximum term of imprisonment of 20 years, on each count.

They were arrested on Jan. 11 and appeared before a federal judge in Bridgeport. Vaswani was released on a $250,000 bond, while Malik was held pending a detention hearing that was scheduled for Jan. 16.