KC Reporter

KANSAS CITY, Mo. – James L. McGinnis, a co-founder of the Christian health care sharing ministry Medical Cost Sharing in St. Joseph, Missouri, has pleaded guilty to his involvement in an $8 million wire fraud scheme. McGinnis, 77, admitted to his role in cheating hundreds of members and making false statements on a personal tax return. Alongside him, Craig Anthony Reynolds, another co-founder, had previously pleaded guilty to the same charges in November 2023.

McGinnis and Reynolds were found to have used deceptive tactics to market Medical Cost Sharing as a "Health Care Sharing Ministry," collecting over $8 million in member contributions while paying out only 3.1 percent in health care claims. They personally profited by pocketing at least $5,168,268 from member contributions between December 2015 and December 2022, amounting to 64 percent of total member contributions.

The scheme involved marketing Medical Cost Sharing as a "Christian Health Care Sharing Ministry" through various channels, including insurance brokers, radio stations, social media, and the organization's website. Despite claiming to assist members with healthcare costs, Medical Cost Sharing rarely fulfilled its promises of paying out claims, leading to investigations and legal actions.

In addition to the wire fraud conspiracy, McGinnis also pleaded guilty to making false statements on a personal tax return, further complicating the legal implications of the case. As part of the plea agreement, McGinnis is required to pay restitution to the victims of the fraud and the IRS, forfeiting any property obtained through the fraudulent scheme.

The potential consequences for McGinnis include a sentence of up to 23 years in federal prison without parole, although the final sentencing will be determined by the court based on various factors. The prosecution of this case involves Assistant U.S. Attorneys Kathleen D. Mahoney, Patrick Daly, and John Constance, with investigations conducted by the FBI and IRS-Criminal Investigation.

For individuals who believe they may have been affected by the Medical Cost Sharing fraud and seek restitution, the FBI has set up a Victim Information Page for them to provide their details and receive assistance.

The guilty plea from James L. McGinnis adds another chapter to the ongoing legal saga surrounding Medical Cost Sharing, shedding light on the deceptive practices that have impacted numerous individuals associated with the organization.