12-year sentence for St. Joseph man for health care scheme
By NewsPress Now
A St. Joseph man will spend 12 years in federal prison for his role in a health care scheme.
James L. McGinnis, 78, of St. Joseph, is the co-founder of Medical Cost Sharing, a Christian health care ministry that defrauded hundreds of members of almost $8 million, according to a release from the U.S. Department of Justice. In April, he pleaded guilty to one count of wire fraud and one count of making false statements on a tax return.
In addition to serving the 12-year sentence without parole, McGinnis has been ordered to pay more than $7 million in restitution to the victims of his scheme, about $143,000 to the IRS and more than $10,000 to the Missouri Department of Revenue.
McGinnis served as chief operating officer of Medical Cost Sharing from 2014 to late 2022.
The second co-founder, Craig Anthony Reynolds, 62, also of St. Joseph, pleaded guilty and was sentenced in June to 17 years and six months on the same charges. Reynolds served as the president and chief executive officer of the organization.
Both McGinnis and Reynolds admitted to using false and fraudulent promises to market Medical Cost Sharing as a “health care sharing ministry” to defraud hundreds of “ministry members” collecting about $8 million in member “contributions” but only paying 3.1% in health care claims, taking the other contributions as personal profit.
Both profited by more than $5 million in customer contributions. They marketed Medical Cost Sharing through insurance brokers, radio stations, social media and a website.
The fraudulent company promised members that if they paid monthly contributions the company would pay member claims after the deductible was met, however, McGinnis and Reynolds admitted that the company rarely paid members’ health care claims or only paid part of a claim if the member filed a complaint with their state attorney general or hired an attorney to represent them against the company.
The company did not pay any member claims for two years from Feb. 22, 2021, to December of 2022, but it did collect more than $1.2 million in dues for those two years.
McGinnis also admitted to filing a federal income tax return on which he claimed he had no taxable income in 2019, in reality, he received approximately $140,000.
The FBI has created a page for victims of the Medical Cost Sharing fraud scheme which can be found at www.fbi.gov/how-we-can-help-you/victim-services/seeking-victim-information/mcs-victim-information-page.
