KC Reporter

KANSAS CITY, Mo. – The co-founder of a Christian health care sharing ministry in St. Joseph, Mo., was sentenced in federal court today for his involvement in an $8 million wire fraud conspiracy that deceived hundreds of members and for making false statements on a personal tax return.

Craig Anthony Reynolds, 62, of St. Joseph, received a sentence of 17 years and six months in federal prison without parole from U.S. District Judge Greg Kays. Reynolds was taken into custody immediately after the hearing to begin serving his sentence. The court ordered Reynolds to pay $7,758,908 in restitution to the victims, $253,474 to the Internal Revenue Service, and $46,550 to the Missouri Department of Revenue.

Additionally, Reynolds must forfeit $462,771 to the government. This amount includes proceeds from the sale of a residence in St. Joseph, cash representing his interest in another residence in St. Joseph, the values of a Lincoln Navigator and a Harley-Davidson motorcycle which will be sold, and the contents of several bank accounts.

Reynolds incorporated and operated Medical Cost Sharing as its president and chief executive officer from 2014 through December 2022. On Nov. 14, 2023, he pleaded guilty to one count of conspiracy to commit wire fraud and one count of making false statements on a tax return.

In a related case, co-defendant James L. McGinnis, 77, also from St. Joseph, pleaded guilty on April 2, 2024, to similar charges and awaits sentencing. McGinnis co-founded Medical Cost Sharing and served as its chief operating officer during the same period.

Both Reynolds and McGinnis admitted that they used deceptive promises to market Medical Cost Sharing as a “Health Care Sharing Ministry” with the intent to defraud hundreds of members. They collected over $8 million in member contributions but paid only 3.1 percent in health care claims while retaining most contributions for personal gain.

From December 2015 through December 2022, Reynolds and McGinnis pocketed at least $5,168,268 from member contributions—representing at least 64 percent of total contributions for their personal profit.

Medical Cost Sharing was marketed as a “Christian Health Care Sharing Ministry” through various channels including insurance brokers and social media platforms. Its sales materials emphasized its tax-exempt status under section 501(c)(3), differentiating it from for-profit health insurance companies.

The organization's website claimed: “while we are not an insurance company...we help you pay your healthcare costs... 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.”

Despite these claims, Reynolds and McGinnis admitted that Medical Cost Sharing rarely paid members’ health care claims unless pressured by complaints or legal action against them.

Federal agents executed search warrants on Dec. 13, 2022 at Medical Cost Sharing’s business location as well as at the residences of Reynolds and McGinnis seizing property derived from fraudulent proceeds. Despite this intervention Medical Cost Sharing continued attempting to collect membership dues until Dec. 27 when a temporary restraining order prohibited further fraudulent activities by Medical Cost Sharing or its operators.

Reynolds also acknowledged filing false tax returns between 2018-2021 claiming no taxable income despite receiving substantial amounts during those years including at least $354,292 in taxable income for 2019 alone according to court documents.

Furthermore he defrauded U.S Treasury by applying for COVID-related tax credits using false information securing $42k+ worth Employee Retention Credits fraudulently during tax year '21

Assistant U.S Attorneys Kathleen D Mahoney Patrick Daly John Constance prosecuted this case following investigations conducted jointly by FBI & IRS-Criminal Investigation units

FBI has established an MCS Victim Information Page enabling victims seeking restitution due losses suffered owing this scheme can provide requisite details via https://www.fbi.gov/how-we-can-help-you/victim-services/seeking-victim-information/mcs-victim-information-page

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