Penn Wynne businessman accused of defrauding investors of $8.8M in federal case
Federal prosecutors allege David Dinenberg misled investors in his cannabis-industry payment company and diverted company and government funds for personal expenses.
A 54-year-old Penn Wynne man is facing federal fraud charges after prosecutors accused him of carrying out a years-long scheme that defrauded dozens of investors in his cannabis-related company of more than $8.8 million.
David Dinenberg was charged by information Tuesday in federal court in Philadelphia with one count of securities fraud and four counts of wire fraud, according to U.S. Attorney David Metcalf.
The case centers on KindManage LLC, also known as Kind, a company Dinenberg established around 2013 to provide payment-processing and related services to cannabis growers and distributors in states that had legalized or were preparing to legalize marijuana for medical or recreational use.
Federal prosecutors allege that from approximately April 2014 through April 2023, Dinenberg persuaded dozens of people to invest in Kind and affiliated companies by making false representations about the business’s revenue, valuation and prospects.
Authorities also allege investors were led to believe their entire investments would be used for the benefit of the company.
Instead, prosecutors claim Dinenberg embezzled more than $500,000 from Kind and spent the money on unauthorized personal expenses, including his sons’ college tuition, rent on a luxury California home and social club memberships.
In total, the federal information alleges Dinenberg defrauded investors of more than $8.8 million over the course of the scheme.
Rhode Island also allegedly targeted
Federal authorities say the alleged misconduct extended beyond the company’s investors.
Prosecutors accuse Dinenberg of using Kind to defraud the state of Rhode Island of approximately $175,000 in fees collected from marijuana growers during 2020 and 2021.
Under Kind’s contract with Rhode Island, most of those fees were supposed to be turned over to the state government. Instead, Dinenberg allegedly transferred the money into his personal bank accounts and used it for personal expenses.
The investigation was handled by the FBI Philadelphia’s Newtown Square Resident Agency, with Assistant U.S. Attorney Mark Dubnoff prosecuting the case.
If convicted, Dinenberg faces a maximum possible sentence of 20 years in prison for the securities fraud charge and 20 years for each wire fraud charge. Those are statutory maximums and do not indicate what sentence he would receive if convicted.
The charges are allegations. Dinenberg is presumed innocent unless and until proven guilty in court.
