Businessman pleads guilty in rigging meters to overcharge Kentucky city for natural gas

An owner of a natural gas company has admitted rigging meters to charge a Kentucky city for gas that wasn’t delivered.

Mark Edward Holbrook pleaded guilty this week in federal court in London to a charge of conspiracy to illegally convert natural gas from an interstate pipeline, which is punishable by up to five years in prison.

Holbrook agreed to pay $1.2 million in restitution to the city of Somerset and $172,964 to Delta Natural Gas, according to his plea document.

Holbrook worked with his son, Marshall Holbrook, in the natural gas industry in southeastern Kentucky. They combined their interests into a company called Puissant Industries in 2009, according to the court record.

Mark Holbrook and his wife controlled about two-thirds of the company and Marshall Holbrook and his wife controlled a third, the court record says. The company sold natural gas to the city of Somerset, which has a distribution system serving homes and businesses, and used Delta to move gas to Greystone Energy, a company based in Lexington.

In early 2016, the price of natural gas had fallen significantly, which hurt the Holbrooks’ business, according to Mark Holbrook’s plea agreement

To compensate, the father and son agreed to manipulate meters used to measure the flow of gas from their company to Somerset and Delta, making it appear their company was supplying more gas than it actually was, according to the plea.

Somerset and Delta paid the Holbrooks for gas they never received, the document said.

Mark Holbrook “regularly manipulated” meters until May 2019, when the city and Delta got suspicious and stopped doing business with his company, according to court records.

Mark Holbrook also agreed to pay a judgment of $332,952 to the government, according to his plea agreement.

Marshall Holbrook pleaded guilty in November. The father and son are scheduled to be sentenced later this year.