The U.S. government is looking to seize a $1.7 million Hyde Park home bought by the former CEO of a Cincinnati tech startup, furthering claims it was purchased using stolen investor funds.
The filing, submitted last week by U.S. Attorney Ken Parker and verified by Colin Malone, a special agent with the Federal Bureau of Investigation, requests a forfeiture be ordered by the court and seeks permission for the U.S. Marshals Service to enter in order to conduct an inspection and inventory of the property.
The home in question is at the center of a lawsuit filed by Over-the-Rhine’s Refinery Ventures against Ben Cantey, co-founder and former CEO of Rumby, a laundry and dry cleaning delivery startup. Refinery claimed Cantey paid himself large commissions using investor funds and fabricated the company’s financial data, among other allegations.
The newest document also confirms the FBI has been investigating Cantey’s alleged wire fraud scheme since November and details Cantey's purchase of the Hyde Park residence. Both Refinery's lawsuit and the filing said he wired $1 million in funds May 6 and another $695,000 in funds May 9 from Rumby’s Bank of America checking account to a trust account.
Property records show the Hyde Park home, located on Garden Place, was purchased for $1.7 million May 20.
Refinery in its suit said Cantey made another $1 million in transfers in August from Rumby’s account – nearly $200,000 toward a multi-year, multimillion-dollar Cincinnati Bengals sponsorship that included a 16-seat suite; $365,000 in two separate transfers to Cantey himself; and $18,000 on a purchase from luxury jewelry brand Cartier.
FBI interviews Cantey
The FBI said it interviewed Cantey Nov. 1 with counsel present, although the name of the attorney is not listed in the filing. The document said Cantey told federal officials he had been making “false reports to current and potential investors” since October 2020.
That’s around the same time Cantey’s co-founder Justin Boisvert left the company, giving Cantey “sole control” over the Bank of America account, per documents. Boisvert is also suing Cantey in the state of California for stealing funds and defrauding investors.
In its interview, the FBI said Cantey admitted most of the financial numbers he communicated to investors were “materially false.”
To generate revenue numbers, Cantey said he would use data from high-performing customers so it would appear as if all customers were performing at that level.
Cantey’s withdraws on more than one occasion left Rumby with a negative account balance.
Rumby’s attorney, Eric Goering, managing partner of downtown-based Goering & Goering, did not respond to request for comment. Cantey has also not responded to previous requests from Cincy Inno.
Rumby files for bankruptcy, Refinery lawsuit on hold
Cantey in past interviews with Cincy Inno furthered claims that Rumby was growing quickly, with a $20 million Series A funding round in the works that would push its valuation to $100 million. The company’s platform connects customers with delivery services like DoorDash and Postmates to pick up and deliver their laundry and dry cleaning. Rumby’s business-to-business (B2B) platform, Rumby Exchange, also connects hotels, commercial buildings, apartments and condominiums to independent dry cleaners for services that include customer laundry, dry cleaning, shoe repair and alterations.
Refinery’s lawsuit – which names the company, Cantey and board member Jason “Jay” Gould as defendants – landed Nov. 30. The firm is looking to recoup its $3 million investment.
Rumby, days later, filed for Chapter 11 subchapter V bankruptcy, with reported assets between $0 and $50,000 and debts between $1 million to $10 million. Among its largest creditors is the Bengals. Rumby owes the team $1.7 million for breach of contract as part of its sponsorship deal with the team, according to the filing.
Cantey in October resigned as CEO, and Rumby's more than 20 employees have also been terminated. Nicholas DeLuca, an individual investor, is currently serving as director of the company.
Refinery’s lawsuit is on hold while the bankruptcy progresses. A meeting of creditors is scheduled for Jan. 5 in Cincinnati.
There are currently no deadlines or hearings scheduled in the forfeiture case.
