The owner of a tobacco wholesale company in Connecticut has been sentenced to 20 months in federal prison for defrauding the state out of more than $1 million in tax revenue over the course of about two years.
Khawar Khokhar, 37, of Ellington faced sentencing on Tuesday in federal court in Hartford where U.S. District Judge Sarala V. Nagala ordered that his prison term will be followed by two years of supervised release, according to the U.S. Attorney’s Office for the District of Connecticut.
Authorities said Khokhar owned and operated Smokin’ Wholesale LLC, a Connecticut-licensed tobacco wholesale business that acquired smokeless tobacco and other tobacco products from out-of-state distributors in Pennsylvania and Illinois. The products were then sold to retail merchants in Connecticut.
Between around May 2017 and June 2019, Khokhar and Smokin’ Wholesale purchased about $2 million in tobacco products from distributors but failed to accurately report to the state Department of Revenue Services the value of the products that were imported into Connecticut, federal officials said. He also failed to pay to the state the tobacco-related taxes that were owed, according to officials.
Authorities said the scheme led to the state losing more than $1.2 million in taxes.
Nagala ordered Khokhar to pay about $1.14 million in restitution and to forfeit $60,707 that was seized during the investigation.
Khokhar was charged in connection with the investigation in May 2024. In April, he pleaded guilty to a conspiracy charge.
Authorities said Khokhar is free on a $100,000 bond and is required to report to prison on Jan. 19, 2026.
“In direct response to Khawar Khokhar’s sentencing, the Department of Revenue Services recognizes the importance of strict consequences which can often act as an effective deterrent in discouraging similar criminal tax avoidance,” James C. Tetreault, supervisory special agent with DRS, wrote in a letter to the U.S. Attorney’s Office.
Tetreault went on to say that authorities found a news release on Khokhar during the investigation that was sent to him by another individual. The release detailed the conviction and sentencing of an unrelated wholesaler and his co-conspirator who received an 18-month prison term and were ordered to pay restitution.
“The Department of Revenue Services has seen a positive effect on tax compliance immediately following these previous criminal actions brought against other actors engaged in similar contraband tobacco products investigations; voluntary reporting and payments have historically risen following these types of actions, which has resulted in subsequent revenue increases and funding opportunities,” Tetreault wrote.
“Khawar Khokhar directly benefitted from his years of defrauding the State of Connecticut at the expense of legitimate and law-abiding business owners and was well aware of the consequences of his fraud,” Tetreault wrote.