Fairfield Man Defrauded CT Out Of $5.8M In Cigarette Taxes: Feds

FAIRFIELD, CT — A West Haven man and a former Fairfield resident are accused of defrauding the state out of approximately $5.8 million in taxes that were due on tobacco products imported into Connecticut, according to authorities. A grand jury in Bridgeport this week returned a 13-count indictment that charged Pavan Vaswani, 39, of West Haven, and Rishi Malik, 45, formerly of Fairfield, with engaging in the tax-fraud scheme, U.S. States Attorney for Connecticut John H. Durham announced in a press release.

Vaswani and Malik were arrested Thursday and appeared in federal court. Malik was detained pending a detention hearing that is scheduled for Jan. 16, while Vaswani was released on a $250,000 bond.

Vaswani has operated KDV Discounts LLC, a wholesale tobacco business based in Bridgeport, while Malik previously operated the business as Connecticut Discounts LLC before selling it to Vaswani in 2012, according to authorities.

“Between 2013 and 2017, Vaswani filed false tax forms with the Connecticut Department of Revenue Services that underreported his taxes due,” the U.S. States Attorney’s Office wrote in a press release. “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.

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