A businessman pleads guilty to rigging meters to increase the cost of natural gas in a Kentucky city
The owner of a natural gas company admitted to rigging meters to charge a Kentucky city for undelivered gas.
Mark Edward Holbrook pleaded guilty this week in federal court in London to conspiracy to illegally divert natural gas from an interstate pipeline, a charge 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 a court record.
The court record says Mark Holbrook and his wife controlled about two-thirds of the company, while Marshall Holbrook and his wife controlled one-third. The company sold natural gas to the city of Somerset, which has a distribution system serving homes and businesses, and used Delta to transport the gas to Greystone Energy, a Lexington-based company.
In early 2016, the price of natural gas dropped dramatically, hurting Holbrooks’ business, according to Mark Holbrook’s plea agreement.
To compensate, Father and son agreed to manipulate the meters They used to measure the flow of gas from their company to Somerset and Delta, making it appear that their company was supplying more gas than it actually was, according to the claim.
Somerset and Delta paid the Holbrooks for gas they never received, the document said.
Mark Holbrook was “regularly tampering” with the meters until May 2019, when the city and Delta became suspicious and stopped doing business with his company, according to court records.
Mark Holbrook also agreed to pay a $332,952 judgment 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.