PHILADELPHIA – United States Attorney David Metcalf announced that David Dinenberg, 54, of Penn Wynne, Pennsylvania, was charged today by information with securities fraud and four counts of wire fraud, arising from alleged schemes to defraud investors in his company and to defraud the State of Rhode Island.As detailed in court filings, in or around 2013, Dinenberg established KindManage, LLC (“KindManage” or “Kind”), for the purpose of providing payment processing and related services to cannabis growers and distributors in states that had authorized, or were on the verge of authorizing, marijuana sales for medicinal and/or recreational purposes.The information alleges that, from about April 2014 to about April 2023, Dinenberg fraudulently induced dozens of people into buying shares of Kind and/or affiliated entities by: (a) making false representations about Kind’s revenues, valuations, and business prospects; and by (b) misleading the investors into believing that their entire investments were being used for the benefit of Kind, when, in reality, the defendant embezzled more than a half-million dollars from Kind and used it to pay for unauthorized personal expenditures, such as his sons’ college tuitions, rent on a luxurious California home, and social club memberships.In total, the information alleges, Dinenberg defrauded these investors out of more than $8.8 million. The information further alleges that Dinenberg also used Kind to defraud the State of Rhode Island out of approximately $175,000 in fees paid by Rhode Island marijuana growers in 2020 and 2021. Instead of remitting most of the fees to the Rhode Island government, per the terms of his contract with the state, Dinenberg diverted the funds to his personal bank accounts and used them to pay for personal expenses.If convicted, the defendant faces a maximum possible sentence of 20 years in prison on the securities fraud charge and 20 years in prison on each of the wire fraud charges.This case was investigated by FBI Philadelphia’s Newtown Square Resident Agency and is being prosecuted by Assistant United States Attorney Mark Dubnoff.The charges and allegations contained in the information are merely accusations. Every defendant is presumed to be innocent unless and until proven guilty in court.
Source: U.S. Department of Justice