Two Indian-Americans were charged Jan. 10, in a 13-count indictment for allegedly engaging in a conspiracy to defraud the State of Connecticut of millions of dollars in taxes due on tobacco products imported into the state.
Pavan Vaswani, 39, of West Haven, Connecticut and Rishi Malik, 45, formerly of Fairfield, Connecticut, are accused of allegedly defrauding the State of Connecticut of approximately $5.8 million by operating a wholesale tobacco business based in Bridgeport, according to a Jan. 12, press release from the United States Attorney for the District of Connecticut. Vaswani and Malik were both arrested; Malik was detained with a pending detention hearing that is scheduled for January 16 while Vaswani was released on a $250,000 bond.
The U.S. Attorney John H. Durham noted that the Indictment is not evidence of guilt and thus the charges are only allegations as of now.
The indictment states that Vaswani operated KDV Discounts LLC, a wholesale tobacco business based in Bridgeport. Malik previously operated the business as Connecticut Discounts LLC before selling it to Vaswani in 2012. Between 2013 and 2017, Vaswani allegedly filed false tax forms with the Connecticut Department of Revenue Services that underreported his taxes due. He then paid over those lower amounts instead of taxes actually owed, the indictment alleges, adding that Malik conspired with Vaswani through means including forming a Pennsylvania company, Discount Deals, to acquire smokeless tobacco that was imported into Connecticut without payment of taxes.
Both Vaswani and Malik will be charged 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.