By BRENT MARTIN
St. Joseph Post
A co-founder of a fraudulent medical cost-share program that
marketed itself as a Christian health care sharing ministry has been sentenced
to 12 years in federal prison and ordered to pay more than $7 million in restitution.
U.S. District Judge Greg Kays sentenced 78-year-old James McGinnis
of St. Joseph in federal court.
In addition to owing victims $7.7 million, the judge
says McGinnis owes $143,000 to the IRS and $10,000 to the Missouri
Department of Revenue. He also must give up his 2021 Ford F-250 pickup.
Earlier this year, McGinnis pleaded guilty to wire fraud and
lying on a tax return. McGinnis began Medical Cost Sharing with 62-year-old Craig
Anthony Reynolds of St. Joseph, who was sentenced earlier. Both admitted they marketed
Medical Cost Sharing as a “Health Care Sharing Ministry” and collected $8 million in member “contributions,” but paid only 3% of the health
care claims filed.
McGinnis and Reynolds pocketed at least $5 million in
member contributions from December 2015 through December 2022.
Federal prosecutors say McGinnis and Reynolds marketed Medical
Cost Sharing as a “Christian Health Care Sharing Ministry” through insurance
brokers, radio stations, social media, and its website. Medical Cost Sharing
sales materials promoted its 501(c)(3) tax-exempt designation, advertising that
it was different from for profit health insurance. The Medical Cost Sharing
website claimed, “while we are not an insurance company, many think of us as a
Christian Health Insurance, or Christian Medical Insurance because, like
conventional insurance plans, we help you pay your healthcare costs. We help
you protect your family. But unlike these corporate, profit based plans, we are
a healthcare sharing ministry … your healthcare costs are shared with other
Christians enrolled in our medical sharing plans.”
Federal agents served search warrants on the Medical Cost
Sharing offices as well as the residences of McGinnis and Reynolds in December
of 2022, seizing property. Medical Cost Sharing continued to try to collect
membership dues even after the search, prompting a federal court to entered a
temporary restraining order against the company.
You can follow Brent on X @GBrentKFEQ and St. Joseph Post @StJosephPost.
