Man pleads guilty in health care fraud

St. Joseph News-Press, Mo.
·2 min read

Apr. 8—The co-founder of a Christian health care ministry in St. Joseph pleaded guilty in federal court Monday for his part in an $8 million wire fraud conspiracy that took money from members without paying many claims.

James L. McGinnis, 77, pleaded guilty to one count of conspiracy to commit wire fraud and one count of making false statements on a tax return. He co-founded Medical Cost Sharing, a tax-exempt organization, and served as its chief operating officer from 2014 through December 2022.

Craig Anthony Reynolds, 62, of St. Joseph, another co-founder of Medical Cost Sharing, pleaded guilty to the same charges in a separate case last November. He incorporated and ran Medical Cost Sharing as its president and chief executive officer from 2014 through December 2022.

McGinnis and Reynolds each admitted that they used false and fraudulent promises to market Medical Cost Sharing as a "Health Care Sharing Ministry" to defraud hundreds of "ministry members." They collected more than $8 million in member "contributions" yet paid only 3.1% in health care claims.

McGinnis and Reynolds kept more than $5 million from member contributions, taking at least 64% of total member contributions for personal profit.

Medical Cost Sharing promised members that if they paid monthly "contributions," it would pay claims after the members' "personal responsibility" (deductible) was met.

In reality, McGinnis and Reynolds admitted, Medical Cost Sharing rarely paid those claims. Sometimes part of a claim would be paid if the member filed a complaint with their state attorney general or hired an attorney.

Medical Cost Sharing paid no claims at all from Feb. 22, 2021, through December 2022, although it collected a total of nearly $1.2 million in dues during those two years.

In addition to the wire fraud conspiracy, McGinnis admitted that he filed a tax return that claimed he had no taxable income in 2019 when he actually received at least $140,881.

McGinnis must pay restitution to Medical Cost Sharing member victims and the IRS and forfeit property obtained from the wire fraud conspiracy. He also is subject to a sentence of up to 23 years in federal prison without parole.

He will be sentenced at a later date.