Another Co-founder of Medical Charity in St. Joseph Pleads Guilty to $8 Million Fraud Scheme

A co-founder of a so-called Christian health care sharing ministry in Saint Joseph pleaded guilty in federal court Monday to his role in an eight million dollar wire fraud conspiracy that reportedly cheated hundreds of members and to making false statements on a personal tax return.

The United States Attorney’s Office of the Western District of Missouri says 77-year-old Saint Joseph resident James L. McGinnis waived his right to a grand jury and pleaded guilty before U.S. District Judge Greg Kays to a federal information that charges him with one count of conspiracy to commit wire fraud and one count of making false statements on a tax return.

McGinnis co-founded Medical Cost Sharing, a tax-exempt organization, and served as its chief operating officer from 2014 through December 2022.

62-year-old Saint Joseph resident Craig Anthony Reynolds, another co-founder of Medical Cost Sharing, pleaded guilty to the same charges in a separate but related case on November 14.

Reynolds incorporated and ran Medical Cost Sharing as its president and chief executive officer from 2014 through December 2022.

McGinnis and Reynolds each admitted that he and his co-conspirators 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 eight million dollars in member “contributions,” yet paid only 3.1 percent in health care claims so that they could personally profit and take most of the members’ contributions for themselves.

McGinnis and Reynolds pocketed at least $5,168,268 from the member contributions from December 2015 through December 2022.

Thus, McGinnis and Reynolds took at least 64 percent of total member contributions for their personal profit.

In addition to the wire fraud conspiracy, McGinnis also pleaded guilty to making false statements on a personal tax return.

McGinnis admitted that he filed a return that claimed he had no taxable income in 2019.

Reynolds received at least $140,881 in taxable income in 2019.

Under the plea agreement, McGinnis must pay restitution to Medical Cost Sharing member victims and the IRS.

McGinnis also must forfeit to the government any property obtained from the wire fraud conspiracy and a money judgment representing all proceeds obtained from the scheme.

Under federal statutes, McGinnis is subject to a sentence of up to 23 years in federal prison without parole.

This case is being prosecuted by Assistant U.S. Attorneys Kathleen D. Mahoney, Patrick Daly, and John Constance.

It was investigated by the FBI and IRS-Criminal Investigation.