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A federal judge sentenced Cincinnati entrepreneur Benjamin Cantey to 40 months in prison after he pleaded guilty to wire fraud in a scheme that defrauded investors of more than $6.5 million. Prosecutors said Cantey misrepresented the financial condition of Carbon IQ Inc., doing business as Rumby, while raising venture capital between 2020 and 2022. Court records state he falsely inflated the company’s revenue, profitability, bank balances, and growth prospects to secure investor funding.
A Cincinnati entrepreneur has been sentenced to more than three years in federal prison after admitting he defrauded investors out of more than $6.5 million through a startup that promised to modernize laundry and dry-cleaning delivery services.
Benjamin Cantey, 43, received a 40-month prison sentence in U.S. District Court after pleading guilty to one count of wire fraud.
Federal prosecutors said he deceived investors by overstating the financial health and growth of Carbon IQ Inc., which operated under the business name Rumby. The U.S. Department of Justice said the scheme unfolded between 2020 and 2022 and caused investors to lose more than $6.5 million.
The case drew attention across Cincinnati’s startup community because Rumby marketed itself as a technology-driven e-commerce platform for laundry and dry-cleaning pickup and delivery. According to federal prosecutors, the company sought venture capital funding while presenting misleading financial information to current and prospective investors. Multiple local and national news outlets also reported on the sentencing and the company’s fundraising practices, citing federal court records.
Investor fraud scheme relied on false financial claims
According to the U.S. Attorney’s Office for the Southern District of Ohio, Cantey repeatedly inflated the company’s revenue, profitability, bank balances, and customer growth while raising capital.
Prosecutors said investors received presentations containing inaccurate financial information designed to portray Rumby as a rapidly growing business. Authorities alleged these misrepresentations persuaded investors to commit millions of dollars to the startup.
One example highlighted by prosecutors involved the company’s cash position. Cantey reportedly told investors Rumby held approximately $1.5 million in its bank account at the end of May 2022. Investigators later determined the account actually had a balance of roughly negative $53,000 at that time.
Federal authorities said the false statements extended beyond bank balances. They alleged Cantey also exaggerated:
- Company revenue
- Profitability
- Customer growth
- Business performance
- Future financial prospects
The Department of Justice said the misleading information created a false impression that Rumby had become a successful technology startup capable of generating substantial returns for investors.
Federal investigation uncovered investor fraud scheme
The criminal case began after a federal grand jury returned an indictment against Cantey in late 2024. Prosecutors initially charged him with multiple fraud-related offenses connected to the investment scheme.
Court filings alleged Cantey also misrepresented his previous entrepreneurial experience while seeking funding for Carbon IQ. Investigators said those claims helped build investor confidence even though they did not accurately reflect the company’s financial condition.
Cantey later entered a guilty plea to one count of wire fraud, avoiding a trial. On Monday, a federal judge sentenced him to 40 months in prison.
Wire fraud is commonly charged in cases involving electronic communications used to facilitate financial crimes. Prosecutors said electronic investor presentations and related communications played a central role in the scheme.
The Department of Justice credited investigators and prosecutors involved in the case for pursuing the fraud allegations and securing the conviction.
Startup investors reminded to conduct due diligence
The case highlights the importance of financial transparency for startup companies seeking outside investment.
Venture capital investments often involve privately held companies with limited operating histories. Investors frequently rely on financial statements, growth projections, customer metrics, and cash balance reports when evaluating opportunities.
Financial experts generally recommend that investors:
- Request independently verified financial statements.
- Review audited records whenever available.
- Confirm major customer and revenue claims.
- Evaluate bank records and cash flow.
- Conduct independent due diligence before investing.
Federal securities regulators have repeatedly warned that private startup investments carry higher risks because financial information may not receive the same level of public disclosure required of publicly traded companies.
The sentencing serves as another example of federal enforcement efforts targeting investment fraud involving privately held businesses. Authorities continue to encourage investors to report suspected fraud to law enforcement and regulatory agencies.
For additional information about federal fraud enforcement, readers can review resources from the U.S. Attorney’s Office for the Southern District of Ohio and investor education materials provided by the U.S. Securities and Exchange Commission’s Investor.gov website.
Also read:
StartupCincy Week 2025: Why Cincinnati’s Innovation Scene Is One to Watch
FAQs
Who is Benjamin Cantey?
Benjamin Cantey is the founder of Carbon IQ Inc., which operated under the name Rumby. Federal prosecutors accused him of misleading investors about the company’s financial performance while seeking venture capital.
What was the investor fraud scheme?
According to prosecutors, the scheme involved providing false financial information to current and prospective investors. The misrepresentations included inflated revenue, profits, cash balances, and business growth, resulting in more than $6.5 million in investor losses.
Why was Benjamin Cantey sentenced to prison?
Cantey pleaded guilty to one count of wire fraud in federal court. A judge sentenced him to 40 months in prison after determining he knowingly used false statements to obtain investment funds.
What can investors learn from this case?
The case highlights the importance of verifying a company’s financial statements and conducting independent due diligence before investing. Regulators recommend reviewing audited financial records and confirming key business claims when evaluating private investment opportunities.
