HARTFORD — Ten people were arrested and thousands of dollars in cash was seized in connection with an investigation into a scheme to evade taxes on tobacco products. It’s estimated the enterprise cost the state up to $6 million in lost revenue.
Connecticut Commissioner of Revenue Services Kevin Sullivan said as a result of a five-month investigation, 10 people who are connected to KDV Discounts, in Bridgeport, were arrested and agents seized more than $50,000 in cash and $234,000 in contraband tobacco from the tobacco wholesaler. The Department of Revenue Services Criminal Investigations Division worked with the Bridgeport police department on the investigation.
“This action has put an end to what has been an ongoing crime involving as much as $250,000 in untaxed tobacco provided by the distributor and sold by local stores each month,” said Sullivan.
KDV Discounts was raided by DRS agents armed with a search warrant. Pavan M. Vaswani, of West Haven, the owner, was arrested and charged with possession/sale of untaxed tobacco and conspiracy to possession/sale of untaxed tobacco. DRS said the illegal tobacco distribution ring sold more than $13 million in untaxed tobacco to around 450 retail locations in Connecticut. The department said the state would have made nearly $6 million in outstanding excise and sales tax had the products been sold legally. The state alleges KDV Discounts was purchasing non-taxed tobacco products in Pennsylvania and Illinois and reselling them in Connecticut. Vaswami was unloading untaxed tobacco products purchased in Pennsylvania when he was arrested. Agents seized a delivery van and $50,000 in cash.
Other KVD Discounts employees and store owners were arrested for possession/sale of untaxed tobacco and conspiracy to possess/sell untaxed tobacco: Carlos Beras of Waterbury, Sayed Ahmed of West Haven, Sheik Hossain of West Haven; Joshua Ortiz of Shelton; Quendri Ortiz of Bridgeport, Mohamed Farook of Naugatuck, Arti Patel of Wallingford, Prashant Patel of Naugatuck, and Abdulkadar Shaikh of Stamford.
If convicted, the crimes carry prison sentence up to two years and fines of up to $2,000. The company’s sales permits may also be revoked.