NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _____________
No. 19-1451 _____________
GOVERNMENT OF THE VIRGIN ISLANDS*
v.
JONATHAN COHEN, Appellant
*(Amended per Clerk’s Order dated 03/14/2019) _______________________________________
On Appeal from the District Court of the Virgin Islands (D.C. Criminal No. 1-14-cr-00041-001) District Judge: Honorable George W. Cannon _______________________________________
Argued May 20, 2020
Before: GREENAWAY, JR., PHIPPS, and FUENTES Circuit Judges.
(Opinion filed: September 9, 2020)
Yohana M. Manning, Esq. [ARGUED] Manning Legal Services Suite 2 2120 Company Street Christiansted, VI 00820 Counsel for Appellant
Denise N. George, Esq., Attorney General Pamela R. Tepper, Esq., Solicitor General Dionne G. Sinclair, Esq., Assistant Attorney General [ARGUED] Su-Layne U. Walker, Esq. Office of Attorney General of Virgin Islands Department of Justice 34-38 Kronprindsens Gade GERS Complex, 2nd Floor St. Thomas, VI 00802 Counsel for Appellee ____________
OPINION* ____________
PHIPPS, Circuit Judge.
Between 2002 and 2013, Jonathan Cohen evaded Virgin Islands tax obligations for
himself and three corporations that he owned. In 2014, the Government of the Virgin
Islands filed a 21-count Information charging Cohen with the willful failure to file a
return, supply information, or pay income taxes, see V.I. Code Ann. tit. 33, § 1524, and
with failure to pay gross-receipt taxes for his three corporations, see id. § 43. The parties
reached a plea agreement under which Cohen would plead guilty to two counts in an
Amended Information and pay $892,402 in restitution. In return, the Government would
recommend five years’ probation, and it would preserve its ability to pursue civil
remedies against Cohen for unpaid taxes. As a matter within its jurisdiction, see
48 U.S.C. § 1612(a), the District Court accepted Cohen’s guilty plea and sentenced him
to the recommended five years’ probation along with $10,000 in fines and the agreed-
upon amount of restitution, which Cohen had to pay within five years. Later, after Cohen
paid $80,000 of the restitution, the District Court amended the restitution order so that
* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent. 2 Cohen had to deposit in the court registry payments of $6,000 monthly and three lump-
sum amounts by September 2020.
But before the expiration of his probation and after Cohen had made some
monthly payments and one lump-sum payment, the Governor of the Virgin Islands
pardoned him. The pardon identified Cohen, specified his conviction, and fully restored
his civil rights:
NOW THEREFORE, by the powers vested in me by Section 11 of the Revised Organic Act of 1954, as amended, I, Kenneth E. Mapp, Governor of the Virgin Islands of the United States, hereby grant JONATHAN KALIS COHEN a PARDON for his conviction in Case No.: Criminal No. DC-2014-CR-0041, in the District Court of the Virgin Islands, judgment having been entered on September 29, 2015, and amended on February 28, 2017, and hereby restore his civil rights in all respects to the extent allowable by law. Order Granting a Pardon to Jonathan Kalis Cohen, Dec. 22, 2018 (JA at 34-35).
After receiving the pardon, Cohen moved to vacate his sentence and to stay the
transfer of his restitution deposits from the court registry to the Government. The District
Court denied those motions, and Cohen appealed that order within fourteen days. In
exercising jurisdiction over a timely appeal of a final order, see 28 U.S.C. § 1291; Fed. R.
App. P. 4(b), we review the District Court’s legal conclusions de novo, see United States
v. Reynolds, 710 F.3d 498, 506 (3d Cir. 2013); see also Saludes v. Ramos, 744 F.2d 992,
993-94 (3d Cir. 1984), and we will reverse those parts of the judgment (i) requiring
Cohen to pay restitution and (ii) denying a stay of the transfer of Cohen’s restitution
deposits from the court registry to the Government.
3 This case concerns the Governor’s power to pardon offenses of Virgin Islands law.
A federal statute, the Revised Organic Act of the Virgin Islands, confers upon the
Governor of the Virgin Islands the power to pardon. See 48 U.S.C. § 1591 (1954)
(permitting the Governor to “grant pardons and reprieves and remit fines and forfeitures
for offenses against local laws”). The Governor’s pardon power closely resembles the
presidential pardon power. See U.S. Const. art. II, § 2, cl. 1 (granting the President the
“Power to grant Reprieves and Pardons for Offenses against the United States”). That
congruence suggests that both powers share similar attributes, despite their differences in
scope (the Governor’s pardon power applies to offenses under Virgin Islands law; the
President’s pardon power covers violations of federal law).
Several principles govern the President’s pardon power. A pardon mitigates or
sets aside punishment for a crime. See Nixon v. United States, 506 U.S. 224, 232 (1993);
United States v. Wilson, 32 U.S. (7 Pet.) 150, 160 (1833). Yet despite the potential for
plenary absolution, the pardon power is not an all-or-nothing proposition, and a pardon,
in the form of a commutation, may forgive a portion of the punishment. See Wilson,
32 U.S. (7 Pet.) at 150 n.3 (“The president has power to grant a conditional pardon to a
person under sentence of death, by commuting it into imprisonment for life[.]”).
Similarly, a pardon may impose conditions precedent or conditions subsequent. See id. at
156. Even at its zenith, however, the pardon power does not extinguish civil liabilities
associated with the underlying criminal offense. See Angle v. Chicago, St. Paul,
Minneapolis & Omaha Ry. Co., 151 U.S. 1, 19 (1894) (“An executive may pardon and
thus relieve a wrongdoer from the punishment the public exacts for the wrong, but neither
4 executive nor legislature can pardon a private wrong, or relieve the wrongdoer from civil
liability to the individual he has wronged.”). Likewise, a pardon cannot override other
constitutional protections. See Knote v. United States, 95 U.S. 149, 152-54 (1877); Pa.
Prison Soc. v. Cortes, 622 F.3d 215, 242-43 (3d Cir. 2010). Ultimately, to determine
whether a pardon provides general absolution or is instead subject to limitations or
conditions, courts look to the text of the pardon and construe it in the light most favorable
to the recipient. See Knote, 95 U.S. at 151.
Applying those principles to the Governor’s pardon power reveals that Cohen
received a general pardon, free from any limitations or conditions. The Governor granted
Cohen a “pardon” for his conviction and made clear that the pardon “restore[d] his civil
rights in all respects to the extent allowable by law.” Order Granting a Pardon (JA at 34-
35). The pardon was not a commutation, limited to only a portion of Cohen’s
punishment. Nor was the pardon subject to any conditions.1
Without any limitations or conditions, the general pardon nullified penalties and
disabilities that attached to Cohen’s offense. See Nixon, 506 U.S. at 232; Wilson, 32 U.S.
(7 Pet.) at 160; see also Ex parte Garland, 71 U.S. (4 Wall.) 333, 380 (1866).
1 Contrary to the rule that a pardon is viewed in the light most favorable to the recipient, see Knote, 95 U.S. at 151, the Dissent submits that the pardon cannot be ‘full’ or ‘unconditional’ because it does not use those precise words. See Dis. Op. at 6. But in any light, especially one most favorable to Cohen, the full and unconditional nature of the pardon is evident from (i) the statement that the pardon “restore[s] [Cohen’s] civil rights in all respects to the extent allowable by law,” and (ii) the absence of any conditions. Order Granting a Pardon (JA at 35).
5 Consequently, Cohen is no longer bound by his criminal conviction – including the court-
ordered restitution schedule.2
For that reason, the District Court erred by enforcing the restitution award after
Cohen received the pardon. Because the pardon was unconditional, any restitution
payments previously deposited in the Court’s registry that have not been distributed to
the Government of the Virgin Islands must be returned to Cohen. See Osborn v. United
States, 91 U.S. 474, 474 (1875).
In disagreeing, the Dissent contends that the restitution award does not constitute
punishment and therefore cannot be forgiven through pardon. See Dis. Op. at 4-5. But as
a general matter, a restitution award in a criminal case constitutes part of a defendant’s
sentence and is punitive. See United States v. Sleight, 808 F.2d 1012, 1020 (3d Cir.1987)
(explaining that under federal law, restitution, when “imposed as a part of sentencing[,]
. . . remains inherently a criminal penalty”); see also United States v. Edwards, 162 F.3d
87, 91 (3d Cir.1998) (rejecting the view that under federal law restitution imposed in a
criminal case is civil, not criminal). The Supreme Court of the Virgin Islands has
reached the same result. See Hightree v. Virgin Islands, 60 V.I. 514, 530 (2014). More
2 It is presently immaterial whether Cohen remains bound by his promise in the plea agreement to pay restitution. It may be that his promise to pay restitution survives the pardon because “plea bargains are essentially contracts,” Puckett v. United States, 556 U.S. 129, 137 (2009). But since plea agreements are executory contracts “until embodied in the judgment of a court,” Mabry v. Johnson, 467 U.S. 504, 507 (1984), it may also be that by eliminating penalties for the offense, the pardon would reduce the plea agreement to an unenforceable executory contract. Regardless, any lingering contractual obligation that Cohen may have from the plea agreement to pay restitution would be a civil remedy, separate and apart from the criminal sentence, and that sentence has no operative effect after the pardon. See Angle, 151 U.S. at 19. 6 specifically still, Cohen was sentenced to probation, and under the Virgin Islands Code,
absent substantial reason, a probationary sentence must impose restitution. See V.I. Code
tit. 5, § 3721. With the inclusion of that restitution order in his probationary sentence,
Cohen’s failure to pay restitution would trigger revocation proceedings, and potentially a
prison sentence. See V.I. R. Crim. P. 32.1(a)(2). By carrying the possibility of
incarceration as a consequence for non-compliance, see id. R. 32.1(a)(6), the restitution
order most certainly constitutes part of Cohen’s punishment.
While the Governor’s pardon extinguishes Cohen’s criminal penalty, it does not
absolve him of civil tax liability for the years in which he did not pay taxes. Thus,
nothing about the pardon prevents the Government of the Virgin Islands from pursuing
civil remedies to collect outstanding taxes from Cohen – which do not appear to be
precluded by the statute of limitations. See V.I. Code Ann. tit. 33, §§ 1161-1163. The
pardon simply frees Cohen from criminal penalty associated with his tax liability, which
still remains.
For these reasons, we will reverse those parts of the judgment (i) requiring Cohen
to pay restitution and (ii) denying a stay of the transfer of Cohen’s restitution deposits
from the court registry to the Government.
7 GREENAWAY, JR., Circuit Judge, dissenting.
In this case, Jonathan Kalis Cohen seeks to evade paying hundreds of thousands of
dollars in owed back taxes. He does so in reliance on a gubernatorial pardon that made
no mention of his owed taxes and no attempt to discharge his obligation to pay. Because
payment of back taxes is not a “punishment” necessarily discharged by a pardon, I see no
basis for extending the gubernatorial pardon to extinguish Cohen’s obligation to pay
restitution. I must therefore dissent.
I. Background
Cohen was charged with and pled guilty to willful failure to file tax returns and
pay taxes in violation of Virgin Islands law. As part of his plea agreement, he agreed to
pay restitution in full to the Virgin Islands Government Bureau of Internal Revenue (the
“VIBIR”) in the amount of $892,402.00. He was also sentenced to five years’ probation
and ordered to pay $10,000 in fines. He was pardoned in December 2018, well before he
finished paying the full amount owed in restitution.
II. Cohen’s Restitution Consists of Owed Back Taxes
As a starting point, I emphasize that it is undisputed that the restitution Cohen was
ordered to pay consists solely and entirely of Cohen’s owed back taxes. Cohen and the
VIBIR arrived at this number, $892,402.00, after extensive negotiations with the aid of
accountants. As Cohen’s attorney stated at the change of plea hearing:
[W]e’ve done quite a bit of work between accountants to come to the right numbers. The right numbers are contained in the plea agreement, which is, which just reflects the money owed, it doesn’t reflect interest or penalties. And the Government may audit that later. But the agreement is that the
1 restitution is $892,402, and that includes all the income tax in Count 1 and the gross receipts tax in Count 2.
1:14-cr-0041-GWC, Doc. 184, at 9; see also JA7 (“Cohen knew that the amount
he agreed to pay, and was ultimately ordered to pay, was for payment of taxes.”).
It is well understood that, in criminal tax cases, a court may order restitution that
consists of and operates as a payment of owed taxes. See, e.g., United States v. Clayton,
613 F.3d 592, 596 (5th Cir. 2010) (“[T]he payment of criminal restitution based on taxes
owed constitutes the payment of tax.”). Cohen was thus ordered to pay $892,402.00
solely to satisfy his owed back taxes: the restitution order did not contain or reflect any
other costs.
III. A Pardon Only Discharges Punishment
That the restitution was solely and entirely an assessment of Cohen’s owed back
taxes bears emphasizing because a pardon can only discharge a defendant’s punishment.
See, e.g., Nixon v. United States, 506 U.S. 224, 232 (1993) (“[T]he granting of a pardon
is in no sense an overturning of a judgment of conviction by some other tribunal; it is [a]n
executive action that mitigates or sets aside punishment for a crime.”) (emphasis in
original) (internal quotation marks and alteration); United States v. Wilson, 32 U.S. (7
Pet.) 150, 160 (1833) (“A pardon is an act of grace, proceeding from the power intrusted
with the execution of the laws, which exempts the individual, on whom it is bestowed,
from the punishment the law inflicts for a crime he has committed.”).
This limitation on the power of a pardon is well understood both in case law and
legal literature. In United States v. Noonan, 906 F.2d 952 (3d Cir. 1990), for example,
2 we held that a presidential pardon “does not create any factual fiction that Noonan’s
conviction had not occurred to justify expunction of his criminal court record. Poena
tolli potest, culpa perennis erit (The punishment can be removed, but the crime
remains).” Id. at 960 (internal quotation marks omitted). Our question is therefore
whether Cohen’s restitution order constituted punishment such that it was discharged as a
result of the gubernatorial pardon. In my view, the answer to that question is no.
IV. Cohen’s Restitution Was Not Punitive
We have drawn distinctions between compensatory restitution, punitive restitution,
and restitution that serves both functions. The nature of restitution depends on the
specific case:
We have held that the purpose of restitution under the Mandatory Victim Reparation Act is to compensate victims for their losses and to make them whole. United States v. Diaz, 245 F.3d 294, 312 (3d Cir. 2001); see also United States v. Mustafa, 238 F.3d 485, 490 (3d Cir. 2001) (fine is a form of punishment, whereas restitution is merely intended to compensate victims); Gov’t of the Virgin Islands v. Davis, 43 F.3d 41, 47 (3d Cir. 1994) (restitution is compensatory rather than punitive); United States v. Kress, 944 F.2d 155, 159 (3d Cir. 1991) (restitution differs from fine or penalty and is intended to compensate victims).
On the other hand, in United States v. Edwards, 162 F.3d 87 (3d Cir. 1998), we concluded that for ex post facto purposes, restitution under the Mandatory Victim Restitution Act is a form of penalty. 162 F.3d at 91–92; see also United States v. Sleight, 808 F.2d 1012, 1020–21 (3d Cir. 1987) (prohibiting prejudgment interest because purpose of restitution under Probation Act is to make victim whole; order is imposed as part of sentencing process and remains inherently a criminal penalty). . . .
A survey of case law illustrates that restitution is best classified as compensatory, punitive, or a combination of both according to the context in which the issue arises.
3 United States v. Christopher, 273 F.3d 294, 298–99 (3d Cir. 2001). Restitution is not,
therefore, inherently punitive in all circumstances. Whether it is discharged by a pardon
should depend on the specific facts.
There may well be a case where we struggle to draw the line between a punitive
restitution award and a compensatory restitution award in discerning the reach of a
pardon, but this is not that case. Here, there can simply be no question that the restitution
was purely compensatory. Cohen was legally obligated to pay $892,402.00 in taxes
regardless of whether he committed any crime. The restitution reflects a legal obligation
to pay taxes that existed as a result of Virgin Islands law. Cohen was required to pay his
taxes from 2004 to 2010 but failed to do so. The restitution order does not add anything
to his preexisting payment obligation—the punitive component of his sentence was his
term of probation and the fines levied.
As the Government aptly argued before the District Court, for that reason this
restitution is different from, for example, paying for a victim’s medical bills or any
property damages that resulted from a crime: “[T]hese are all damages that are a
consequence, similar to rebuilding a house after arson, fixing a window after a burglary.
These are consequences of the act that gave rise to the criminal punishment. Taxes are
not consequential. They were owed before and they were compensatory to the
Government of the Virgin Islands.” JA107–08.1
1 The Majority cites the Supreme Court of the Virgin Islands’ decision in Hightree v. Virgin Islands, 60 V.I. 514 (2014), for the proposition that restitution is inherently punitive. Maj. Op. at 6. But the crime for which the defendant was ordered to pay restitution in Hightree was aggravated rape in the first degree, and the defendant was ordered to pay restitution in 4 I therefore agree with the District Court that an order to pay overdue taxes is not
punishment. See JA127–28 (“I do not see paying overdue taxes as punishment. These
are his taxes, he agreed to pay. So I also make it clear that the restitution in this case for
payment of taxes was not penal in nature, it was an order for payment of undue taxes.
The record is clear about that.”); JA11 (“[T]he restitution order in this case was not a
punishment flowing from the crime but a structured agreement under which Cohen would
pay his preexisting tax obligations.”). For that reason, I would hold that Cohen’s purely
compensatory restitution order did not fall under the gubernatorial pardon.
V. The Text of the Pardon Does Not Discharge Cohen’s Restitution Obligation
The text of the pardon itself further supports my conclusion. The Majority
emphasizes that there are no conditions or limitations described in Cohen’s pardon. That
is true—the text of the pardon does not explicitly identify conditions. On the flip side,
nor does the pardon refer to itself as a “full” or “unconditional” pardon (unlike the “full
pardon” in Knote v. United States, 95 U.S. 149, 150–51 (1877)). But most importantly,
the Majority has not acknowledged that the pardon makes no reference whatsoever to
Cohen’s obligation to pay restitution or back taxes. In marked contrast, the pardon
makes specific reference to Cohen’s probationary sentence. It states that Cohen “was
convicted of failure to file tax returns . . . and sentenced to five (5) years’ probation.”
JA34. Where the pardon makes specific reference to Cohen’s probationary sentence, and
the form of compensation for the victim’s counseling services. Id. at 517, 519. Restitution in such a case differs markedly from restitution that consists solely and undisputedly of owed taxes. The Supreme Court of the Virgin Islands has never indicated that restitution in a tax case is inherently punitive. 5 no mention at all of restitution or Cohen’s owed taxes, that choice of wording must be
viewed as intentional: the Governor’s pardon does not manifest any intention to eliminate
Cohen’s obligation to pay restitution. Indeed, how could it. Governors are not generally
in the business of determining an individual citizen’s tax liability. Here, the plain
language of the pardon does not discharge Cohen’s obligation to pay his back taxes—it
extinguishes only the remainder of his probationary sentence and any associated
limitations on his civil rights.
The Majority’s decision will bestow an undeserved windfall on Cohen to the
detriment of the people of the Virgin Islands. Of course, the VIBIR may now seek
payment through the tax courts. But that process will be lengthy and of immense cost to
the Virgin Islands. More important, the fact that the Government of the Virgin Islands
may seek civil recourse for unpaid taxes should not be of any consequence here.
Cohen has already admitted that he will attempt to challenge the $892,402.00
figure and assert other defenses in those proceedings to avoid paying the full amount of
his back taxes, in spite of the fact that he agreed that the restitution ordered reflected his
owed taxes. See Oral Arg. 8:29-8:40; 12:08-12:13; 26:40-27:33; 38:13-38:23 (May 20,
2020), https://www2.ca3.uscourts.gov/oralargument/audio/19-
1451_GovernmentVirginIslandsv.Cohen.mp3; see also JA11 (Cohen stated at his
sentencing that he “will still pay [his] obligations in taxes to the Virgin Islands
Government.”). I see no reason to grant Cohen this windfall where the Governor’s
pardon made no attempt to extinguish Cohen’s restitution obligation. For these reasons, I
6 would affirm the District Court’s denial of Cohen’s Motion to Vacate. Given my
divergence of viewpoint, I respectfully dissent.