Two Indian Americans face charges for defrauding the State of Connecticut

Two Indian American men were charged for allegedly defrauding the State of Connecticut of $5.8 million dollars in taxes due for importing tobacco products into the state. The duo operated a wholesale tobacco business based in Bridgeport in Connecticut.

Pavan Vaswani, 39, of West Haven, Connecticut and 45-years-old Rishi Malik formerly of Fairfield, Connecticut were arrested on Jan.11. “A grand jury in Bridgeport returned a 13-count indictment charging Vaswani and Malik 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,” a statement from the United States Attorney’s office of the District of Connecticut said.

According to the United States Attorney’s office of the District of Connecticut, Vaswani was released on a bond of $250,000, while Malik was detained with a pending detention hearing scheduled for Jan.16. If convicted, Malik could be deported to India.

In the indictment, it has been alleged that Vaswani has been operating KDV Discounts LLC, a wholesale tobacco business based in Bridgeport. “Malik had been operating it previously 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,” said the statement.

He then paid over those lower amounts instead of taxes actually owed. Malik continued to be involved in the business even after selling it.

“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. The tax in Connecticut is about 50 per cent of the value of smokeless tobacco brought into the state,” the statement added.

The United States’ Attorney John H. Durham has noted that the Indictment is not evidence of guilt and so, the charges are only allegations as of now until they are proven guilty.

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 offence that has a maximum term of 5 years in prison. They have also been ordered to pay their owed taxes and forfeit anything gained from illegal earnings. According to the statement, Vaswani has been charged 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.

In December 2017, four Indian Americans were charged for pretending to be tax officials and defrauding people of $3.5 million. They collected money by allegedly threatening over 7,300 people.