St. Joseph man pleads guilty in fraudulent Christian health care scheme

St. Joseph Post

A 77-year-old St. Joseph man has pleaded guilty to his part in an $8 million scheme to cheat hundreds in the guise of a Christian health care sharing ministry.

James McGinnis pleaded guilty before federal District Judge Greg Kays to avoid a trial.

McGinnis founded Medical Cost Sharing along with 62-year-old Craig Anthony Reynolds of St. Joseph in 2014. Reynolds, who acted as president, pleaded guilty to similar charges late last year.

McGinnis pleaded guilty to one count of conspiracy to commit wire fraud and one count of making false statements on a tax return.

The two promoted Medical Cost Sharing, a tax-exempt organization, as a Christian health care sharing ministry. The two collected more than $8 million in member contributions and paid out only three percent in health care claims.

Federal prosecutors say McGinnis and Reynolds pocketed more than five million dollars from member contributions from December 2015 through December 2022.

The two marketed Medical Cost Sharing widely, stating that while it wasn't an insurance company, it would share members' healthcare costs with other Christians enrolled in the plan. Medical Cost Sharing rarely paid members' health care claims. In fact, prosecutors say it didn't pay any claims from early 2021 through the end of 2022 even though it collected nearly $1.2 million dues during that time.

On December 13th of 2022, federal agents served search warrants on the Medical Cost Sharing business location as well as the residences of both McGinnis and Reynolds, seizing property obtained through the scheme. Later that month the court entered a restraining order against Medical Cost Sharing, because it continued to collect membership dues after the search and seizure warrants were served.

Under the terms of the plea agreement, McGinnis must make restitution to Medical Cost Sharing members and to the IRS. McGinnis also has been ordered to forfeit property obtained from the wire fraud conspiracy.

McGinnis will be sentenced later.

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