John H. Durham, United States Attorney for the District of Connecticut, today announced that, on Jan. 10, a grand jury in Bridgeport returned a 13-count indictment charging PAVAN VASWANI, 39, of West Haven, and RISHI MALIK, 45, formerly of Fairfield, with engaging in a conspiracy to defraud the State of Connecticut of millions of dollars in taxes due on tobacco products imported into the state.
VASWANI and MALIK were arrested yesterday and appeared before U.S. Magistrate Judge William I. Garfinkel in Bridgeport. MALIK was detained pending a detention hearing that is scheduled for January 16. VASWANI was released on a $250,000 bond.
As alleged in the indictment, VASWANI has 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 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. 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.
It is alleged that the State of Connecticut was defrauded of approximately $5.8 million through this scheme.
The indictment charges VASWANI and MALIK with one count of conspiracy to commit wire fraud and to violate the Contraband Cigarette Trafficking Act (“CCTA"), 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.
U.S. Attorney Durham stressed that an Indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This matter is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Connecticut Department of Revenue Services, Criminal Investigations Division. The case is being prosecuted by Assistant U.S. Attorneys Jennifer R. Laraia and Michael S. McGarry.
Source: U.S. Department of Justice, Office of the United States Attorneys
