Home Consumer Goods Ex-Bridgeport tobacco wholesaler pleads guilty to tax fraud charges

Ex-Bridgeport tobacco wholesaler pleads guilty to tax fraud charges

Rishi Malik, a Fairfield resident who operated the Bridgeport-based tobacco wholesaler Connecticut Discounts LLC, has pleaded guilty to one count of conspiracy to commit wire fraud and to violate the Contraband Cigarette Trafficking Act (CCTA).

tax fraud tobaccoMalik and a business partner ran Connecticut Discounts LLC for several years before selling the company in 2012 to Pavan Vaswani, who changed the company’s name to KDV Discounts LLC. Prior to the sale, Malik underreported the amount of tobacco he imported into Connecticut for distribution on forms that are filed with the Connecticut Department of Revenue Services. After selling his company, Malik worked with Vaswani on importing tobacco products from out-of-state suppliers, sometimes delivering payments in cash. Between 2013 and 2017, Vaswani underreported his imports on the  forms, defrauding Connecticut of approximately $5.8 million in taxes.

In 2014, Malik registered Discount Deals LLC, with an address in Sciota, Pennsylvania, under the guise of operating a tobacco wholesaler. Malik used Discount Deals to buy more than $1.1 million in smokeless tobacco products from Pennsylvania suppliers, with much of the products being provided to KDV for distribution in Connecticut. Discount Deals made no tax payments to the state of Connecticut between 2014 and 2017 and about  $400,000 in smokeless tobacco tax was not reported to Connecticut or other states.

Malik and Vaswani were arrested in January and Vaswani pleaded guilty to the same offenses acknowledged by Malik in his plea deal; the pair also agreed to a restitution order of $5.8 million. Both face a maximum term of five years in prison on the wire fraud charge and a maximum of 20 years in prison on the CCTA violations. Malik and Vaswani are released on bonds pending their sentencing.

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