Tobacco Wholesaler Sentenced to 18 Months in Prison for Defrauding Connecticut of $5.8M in Taxes
John H. Durham, United States Attorney for the District of Connecticut, announced that PAVAN VASWANI, 40, a citizen of India residing in West Haven, was sentenced today by U.S. District Judge Janet C. Hall in New Haven to 18 months of imprisonment, followed by two years of supervised release, for his role in a scheme to defraud the State of Connecticut of more than $5.8 million in taxes due on tobacco products imported into the state.
According to court documents and statements made in court, the State of Connecticut imposes tax on tobacco products imported into Connecticut for distribution within Connecticut. Tobacco amounts purchased, and taxes due, are reported on Forms OP-300, which are filed with the Connecticut Department of Revenue Services.
For several years until 2012, Rishi Malik and a partner operated Connecticut Discounts LLC, a tobacco wholesale business based in Bridgeport. Through that company, Malik obtained tobacco products from out-of-state suppliers and distributed the products to a network of clients who offered tobacco products for retail sale. While operating Connecticut Discounts, Malik caused OP-300 forms to be filed with the Connecticut Department of Revenue Services, which underreported the amount of tobacco he imported into the state for distribution.
In June 2012, Malik sold Connecticut Discounts to Vaswani. Vaswani, with Malik’s assistance, continued the tobacco wholesale business under the name KDV Discounts, LLC. Between January 2013 and April 2017, KDV acquired almost $12 million in tobacco products, primarily cigars and other products, from suppliers in Pennsylvania, and distributed these products to hundreds of customers in Connecticut that stocked tobacco products for retail sale. On the OP-300 forms that Vaswani filed with the Department of Revenue Services on behalf of KDV, the amounts reported were a small fraction of what KDV actually acquired. Through this scheme, Vaswani failed to report approximately $5,821,057 in tax to the State of Connecticut.
Read more: https://www.justice.gov/usao-ct/pr/tobacco-wholesaler-sentenced-18-months-prison-defrauding-connecticut-58-million-taxes
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