Indictment Charges Tobacco Wholesaler with Operating Tax Fraud Scheme

Vanessa Roberts Avery, United States Attorney for the District of Connecticut, today announced that a federal grand jury in New Haven has returned a 10-count indictment charging KHAWAR M. KHOKHAR, 35, of Ellington, with offenses stemming from an alleged tax fraud scheme.

The indictment was returned on May 15, 2024.  Khokhar appeared today before U.S. Magistrate Judge Thomas O. Farrish in Hartford, pleaded not guilty, and was released on a $100,000 bond.

As alleged in the indictment and statements made in court, Khokhar operated Smokin’ Wholesale LLC, a Connecticut-licensed tobacco wholesale business that acquired smokeless tobacco and other tobacco products from out-of-state distributors, including businesses in Pennsylvania and Illinois, and sold the products to retail merchants in Connecticut.  Between approximately May 2017 and June 2019, Khokhar and Smokin’ Wholesale purchased approximately $2 million in tobacco products from the distributors, but failed to report accurately to the Connecticut Department of Revenue Services the value of the products imported into the state, and failed to pay to the state the associated tobacco taxes owed.  Through this scheme, Khokhar and others caused Connecticut to suffer a tax loss of approximately $1 million.

The indictment charges Khokhar with one count of conspiracy, an offense that carries a maximum term of imprisonment of five years; eight counts of wire fraud, an offense that carries a maximum term of imprisonment of 20 years on each count; and one count of engaging in an illegal monetary transaction, an offense that carries a maximum term of imprisonment of 10 years.

U.S. Attorney Avery stressed that an indictment is not evidence of guilt. Charges are only allegations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

This investigation is being conducted by the U.S. Postal Inspection Service and the Connecticut Department of Revenue Services, Criminal Investigations Division.  This case is being prosecuted by Assistant U.S. Attorney Michael S. McGarry.