Federal prosecutors charged Penn Wynne resident David Dinenberg, 54, with securities fraud and four counts of wire fraud. Dinenberg allegedly defrauded dozens of investors in his cannabis company out of more than $8.8 million.
U.S. Attorney David Metcalf announced the charges Tuesday, Sept. 29. Dinenberg founded KindManage, known as Kind Financial, in 2013 to provide payment processing and related services to cannabis growers and distributors in states that had legalized marijuana sales.
According to the federal information, Dinenberg allegedly induced investors into buying shares of Kind and affiliated entities from about April 2014 to April 2023 by making false claims about the company's revenues, valuations and business prospects. Prosecutors allege he also misled investors into believing their money was being used entirely for the company's benefit.
Instead, prosecutors say Dinenberg embezzled more than $500,000 from Kind and spent it on personal expenses: his sons' college tuition, rent on a luxury California home and social club memberships.
The charges also allege Dinenberg used Kind to defraud the State of Rhode Island out of roughly $175,000 in fees paid by marijuana growers in 2020 and 2021. Rather than forwarding those fees to the state government as his contract required, he allegedly diverted the money to personal bank accounts.
Kind's investor roster included prominent names. The Philadelphia Inquirer reported in October 2023 that backers included venture capitalist Wayne Kimmel, singer John Legend, former Eagles running back Brian Westbrook and Lindy Snider, whose late father Ed owned the Flyers.
"They burned through a lot of investor cash," Philadelphia-area cannabis venture capitalist Scott Berman told the Inquirer in October 2023. "The Microsoft announcement was a good news release, but it was way premature."
Berman was referring to a 2016 announcement in which Dinenberg claimed Kind was part of a deal with Microsoft to pursue government clients in states with legal marijuana sales, the Inquirer reported.
No attorney for Dinenberg was immediately available in public court records, Patch reported. The charges are allegations. Dinenberg is presumed innocent unless proven guilty.
If convicted, he faces up to 20 years in prison on the securities fraud charge and up to 20 years on each wire fraud count. The FBI's Newtown Square office investigated the case, and Assistant U.S. Attorney Mark Dubnoff is prosecuting. No arraignment date has been announced.
