Businessman to repay $1.3 million over fraudulent gas sales to Kentucky customers

A Kentucky business owner who admitted manipulating meters to get paid for natural gas he didn’t deliver has been sentenced to one year and a day in federal prison.

The sentence for Mark Edward Holbrook, 72, includes a order to pay $1.2 million in restitution to the city of Somerset and $172,964 to Delta Natural Gas.

Holbrook, of London also owes the federal government a judgment of $332,952, according to the court record.

Holbrook and his son, Marshall Holbrook, of Knox County, worked together in a company called Puissant Industries, which sold natural gas from wells the company controlled in southeastern Kentucky and moved gas through Delta’s pipelines.

The business worked well for several years, but hit a rough patch around 2015 when prices for natural gas dropped sharply and Puissant’s delivery expenses rose, one of Mark Holbrook’s attorneys, Brandon W. Marshall, said in a sentencing memorandum.

Marshall Holbrook had figured out a way to rig meters so they would show that Puissant was supplying more gas to Somerset and Delta than it actually was.

The father and son used the technique, which they called “propping up the meter,” for several years to get paid for gas they didn’t actually deliver, according to the court record.

The two men pleaded guilty to a conspiracy charge.

Mark Holbrook took part in the scheme out of desperation because his business was faltering, his attorney said in the sentencing memo.

Holbrook had built the business with help from investments his wife had arranged, and it was the sole source of support for his son, who was paying $5,000 a month at the time from a divorce settlement, according to the memo.

“Instead of closing or downsizing, Mark began stealing to keep his floundering business afloat,” Marshall wrote in the memo.

The prosecutor, Assistant U.S. Attorney William P. Moynahan, said in a sentencing memo that the Holbrooks’ fraud ended only after the gas companies detected problems.

“The amount of loss the Holbrooks collectively caused the gas company victims was substantial and that cost was almost certainly passed on to residential gas customers across Kentucky,” Moynahan wrote.

Mark Holbrook’s attorneys sought a sentence of six months in prison and six months on home detention.

However, U.S. District Judge Claria Horn Boom sentenced him to a year and a day in prison, followed by two months on home detention.

Boom sentenced Holbrook May 21 in federal court in London, ordering him to report to prison July 23.

Boom sentenced Marshall Holbrook earlier this month to four months in prison followed by six months on home detention, along with $239,642 in restitution to Delta.