James L. McGinnis, $8M Wire Fraud, Missouri 2024

KANSAS CITY, Mo. – James L. McGinnis, 78, of St. Joseph, Mo., was sentenced to 12 years in federal prison without parole for his role in an $8 million wire fraud conspiracy that cheated hundreds of members of Medical Cost Sharing, a tax-exempt organization he co-founded and served as chief operating officer from 2014 through December 2022.

McGinnis pleaded guilty on April 2, 2024, to one count of conspiracy to commit wire fraud and one count of making false statements on a tax return. He was sentenced by U.S. District Judge Greg Kays on Thursday, Nov. 21, 2024.

McGinnis 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,” collecting more than $8 million in member “contributions” while paying only 3.1 percent in health care claims. McGinnis and his co-conspirators pocketed at least $5,168,268 from the member contributions from December 2015 through December 2022, taking at least 64 percent of total member contributions for their personal profit.

McGinnis and his co-conspirator, Craig Anthony Reynolds, 62, of St. Joseph, marketed Medical Cost Sharing as a “Christian Health Care Sharing Ministry” through insurance brokers, radio stations, social media, and its website. Medical Cost Sharing promised its members that if they paid monthly “contributions,” Medical Cost Sharing would pay claims after the members’ “personal responsibility” (deductible) was met.

However, in reality, Medical Cost Sharing rarely paid members’ health care claims. Sometimes Medical Cost Sharing would pay a part of a claim if the member filed a complaint with their state attorney general and/or hired an attorney to represent them against Medical Cost Sharing.

As part of his sentence, McGinnis was ordered to pay restitution of $7,758,908 to the victims, $143,141 to the Internal Revenue Service, and $10,787 to the Missouri Department of Revenue. He was also ordered to forfeit to the government a 2021 Ford F-250 truck.

McGinnis and Reynolds each admitted that they and their co-conspirators used false and fraudulent promises to market Medical Cost Sharing as a “Health Care Sharing Ministry” to defraud hundreds of “ministry members.”

Source: https://www.justice.gov/usao-wdmo/pr/co-founder-medical-charity-st-joseph-sentenced-8-million-fraud-scheme