A Gubernatorial Pardon May Discharge a Restitution Order, Government of Virgin Islands v. Cohen, 2020 WL 5409049 (3rd Cir., Sept. 9, 2020).
Having friends in high places may be helpful in discharging a restitution order, but be sure the pardon also includes language addressing the restitution or else the Court may find you liable in the end.
This is an interesting case out of the Virgin Islands, in part because it includes an interesting dissent by Judge Greenaway, Jr. The defendant pleaded guilty to two counts involving his evasion of tax obligations for himself and three corporations that he owned. Under the plea agreement, he was allowed to plead to reduced charges and he agreed to pay $892,402 in restitution. In return, the government recommended 5 years’ probation. It preserved its ability to pursue civil remedies against Cohen for unpaid taxes. The court accepted the plea agreement.
Before the expiration of his probationary term, during which he was obligated to make these restitution payments, he was pardoned by the Governor of the Virgin Islands. The pardon identified the defendant, specified his conviction, and then fully restored his civil rights. Kenneth E. Mapp, the Governor of the Virgin Islands signed his order on December 22, 2018.
Once the defendant received his pardon, he moved to vacate his sentence and to stay the transfer of his restitution payments from the court to the government. The District Court denied the motions. The defendant appealed.
The Court here found the Governor’s pardon included the entirety of the defendant’s conviction. Had he wanted to, the Governor could have merely commuted part of the sentence and left the restitution aspect of the case standing. The Governor also could have included conditions on the pardon, but chose not to. Therefore, without any limitations or conditions, the general pardon nullified the penalties and disabilities that attached to the defendant’s offense. See Nixon v. United States, 506 U.S. 224 (1993). The Court further held that, as a general matter, a restitution award in a criminal case constitutes part of a defendant’s sentence and is punitive. If, for example, he had failed to pay the restitution when ordered to do so, he could have been sent to prison.
The Court did find, however, that while the Governor’s pardon extinguished the defendant’s criminal penalty, it did not absolve him of civil tax liability for the years during which he did not pay taxes. Therefore the government is still free to pursue civil remedies in order to collect those outstanding taxes.
Judge Greenaway, Jr.’s dissent argues that because payment of back taxes (which is what the restitution was) is not a “punishment” necessarily discharged by a pardon, there is no basis for extending a pardon to end the defendant’s obligation. According to Greenaway, this is the critical issue—the restitution was solely and entirely an assessment of the back taxes owed, and a pardon can only discharge “punishment.” Here, the restitution was “compensatory.” Restitution, he argues, is not inherently punitive in all circumstances. Additionally, the text of the Governor’s pardon did not discharge the restitution obligation. Judge Greenaway would have affirmed the district court’s denial of the defendant’s motion to vacate.