Lawyers for "pharma bro" Martin Shkreli filed a notice of appeal of his conviction for securities fraud, as a judge agreed to recommend he serve his prison sentence at the minimum security federal camp he has asked for.
At the same time, U.S. District Judge Kiyo Matsumoto left undecided, for now, the question of whether she will also order Shkreli to pay hundreds of thousands in restitution to a defrauded investor.
Shkreli, 35, was convicted last summer in federal court in Brooklyn, New York, of defrauding a group of investors who had put money into two hedge funds he ran. Shkreli had repeatedly misled them about details of the funds, including the fact that they were losing money.
He was also convicted of manipulating the stock of a pharmaceuticals company he founded, Retrophin, whose shares and cash he used to pay back the hedge fund investors after those funds went bust.
The crimes were unrelated to the action for which Shkreli gained widespread infamy in 2015 while heading another drug company: raising the price of the drug Daraprim by more than 5,000 percent. The drug is used to treat a parasitic condition found in pregnant women, babies and HIV-infected people.
Earlier this month, Matsumoto sentenced Shkreli to seven years in prison, imposed a fine of $75,000, and ordered him to forfeit almost $7.4 million in assets to the federal government.
But she held off on officially entering that judgment into the court file because of the open question of whether Shkreli should also have to pay restitution to one of his investors, Richard Kocher.
On Monday, Matsumoto said she was deferring ruling on Kocher's request for restitution. But she finally entered the order of judgment.
Right afterward, Shkreli's lawyers filed an official notice of appeal of his conviction.
That appeal, which could take a year or more to resolve, will play out while Shkreli remains locked up in federal custody. His lawyers will lay out their grounds for reversing his conviction at a later date.
As part of the judgment, Matsumoto said she recommended that the U.S. Bureau of Prisons send Shkreli to the minimum security camp at the U.S. Penitentiary Canaan in northeastern Pennsylvania, "or other similar facility close to New York City."
Shkreli, who most recently lived in Manhattan, has asked to be sent to the camp at Canaan.
The Bureau of Prisons, which has designated Shkreli as inmate No. 87850-053, is not bound by Matsumoto's recommendation.
And the bureau has not yet decided where to ship Shkreli, who since last September has been locked up in the high-security federal jail in Brooklyn.
Matsumoto sent him there that month after revoking his $5 million release bond. The judge had ruled that Shkreli represented a danger to the public because of his bizarre offer of a $5,000 bounty for each strand of hair that his Facebook followers could pull off the head of Hillary Clinton.
Shkreli's lawyer, Benjamin Brafman, during the sentencing hearing this month, told Matsumoto that her designation of Shkreli as a public danger could doom his chances with the Bureau of Prisons of being sent to a minimum security facility.
Instead, Brafman had said, the judge's ruling could mean that Shkreli would be sent to a prison with tougher rules, and with much tougher inmates who would be a threat to the slight-framed convict.
Brafman said he would ask Matsumoto to reverse her ruling, which could allow Shkreli to do the remainder of his sentence at a minimum security camp.
Brafman did not immediately respond to a request for comment Tuesday.
Kocher, a New Jersey builder, has asked Matsumoto to order Shkreli to pay him $778,947.63 in restitution.
Prosecutors also believe Kocher should get restitution. But they have told Matsumoto in a court filing that Shkreli should have to pay just $388,316.49.
The lower amount suggested by prosecutors takes into account a settlement that Kocher obtained from Shkreli. Kocher did not deduct the value of that settlement from the damages that he said he suffered as a result of Shkreli's actions.
That settlement paid Kocher almost $128,000 in cash, and more than 47,000 shares of Retrophin.
Kocher had invested a total of $200,000 in one of Shkreli's hedge funds. He testified at trial that he had been assured by Shkreli that he could redeem the value of his investment on short notice. Kocher testified that was important to him because of the potential that he would need money to fund real estate projects.
Kocher said that in December 2012, he had been told that his investment had grown to about $350,000.
He said he began asking Shkreli for his money in January 2013, after Shkreli told him he was closing the hedge fund. Kocher said he had contracted to buy a building in Jersey City, New Jersey, which he planned to redevelop.
But Shkreli kept stonewalling him, Kocher said in testimony that echoed the stories told by a number of other Shkreli investors.
As a result, Kocher testified, he lacked the funds he needed to close on the purchase of the property. And he had to obtain $300,000 in capital from an investor to complete the deal.
"The terms of this investment required that I not only return the investor's capital investment ($300,000), but also pay interest and a share of the profits totaling another $769,477.13," Kocher wrote in a court filing.
Kocher's restitution request includes that amount of money, plus more than $9,000 in attorney's fees for forcing Shkreli to pay him back for his hedge fund investment, and another $190 in expenses related to helping prosecutors in the case.
Brafman has argued that Shkreli should not have to pay restitution to any of the hedge fund investors because they all ended up with more money than they originally invested.
The windfalls were as a result of the cash Shkreli paid them out of Retrophin's coffers plus the value of company shares they got, which rose as Retrophin began doing well.
Kocher did not immediately return a request for comment.
A spokesman for prosecutors in the U.S. Attorney's office for the Eastern District of New York, who are handling the case, declined to comment.