KC Reporter

James L. McGinnis, co-founder of a Christian health care sharing ministry in St. Joseph, Missouri, has been sentenced to 12 years in federal prison for his involvement in an $8 million wire fraud conspiracy and for making false statements on a tax return. The sentencing was handed down by U.S. District Judge Greg Kays on November 21.

McGinnis, aged 78, must pay restitution totaling over $7.9 million to victims and government agencies. He will also forfeit a 2021 Ford F-250 truck to the government. His guilty plea on April 2 included charges of conspiracy to commit wire fraud and making false statements on a tax return.

The fraudulent activities were conducted through Medical Cost Sharing, an organization McGinnis co-founded and served as chief operating officer from 2014 until December 2022. Co-founder Craig Anthony Reynolds also pleaded guilty to similar charges and received a separate sentence earlier this year.

Both McGinnis and Reynolds admitted using deceptive marketing practices under the guise of running a "Health Care Sharing Ministry." They collected over $8 million in contributions from members but allocated only a small fraction toward actual health care claims.

Marketing efforts presented Medical Cost Sharing as a tax-exempt Christian alternative to traditional insurance plans. However, member claims were rarely paid unless legal action was threatened or taken against the organization.

A significant period between February 2021 and December 2022 saw no claims paid despite nearly $1.2 million collected in dues during that time frame.

In addition to defrauding members, McGinnis filed inaccurate federal income tax returns for the year 2019 by not reporting taxable income exceeding $140,000.

Reynolds was sentenced separately on June 26 to more than 17 years in prison without parole and ordered to pay substantial restitution amounts alongside asset forfeitures including vehicles and real estate proceeds.

The investigation leading up to these sentences involved both the FBI and IRS-Criminal Investigation with prosecution handled by Assistant U.S. Attorneys Kathleen D. Mahoney, Patrick Daly, and John Constance.

Victims seeking restitution can find information via the FBI's MCS Victim Information Page online.

https://www.fbi.gov/how-we-can-help-you/victim-services/seeking-victim-information/mcs-victim-information-page