By BRENT MARTIN
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.
You can follow Brent on X @GBrentKFEQ and St. Joseph Post @StJosephPost.
