Co-founder of Christian ministry in St. Joseph sentenced to 17 years for $8 million wire fraud

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Craig Anthony Reynolds, co-founder of a Christian health care sharing ministry in St. Joseph, Missouri, has been sentenced in federal court for his involvement in an $8 million wire fraud conspiracy and for making false statements on a personal tax return.

Reynolds, 62, was sentenced by U.S. District Judge Greg Kays to 17 years and six months in federal prison without parole. He was taken into custody immediately after the hearing. The court also 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, the court ordered Reynolds to forfeit $462,771 to the government. This includes proceeds from the sale of a St. Joseph residence, cash representing his interest in another St. Joseph residence, the values of a Lincoln Navigator and a Harley-Davidson motorcycle, and the contents of several bank accounts.

Reynolds incorporated and ran Medical Cost Sharing, a tax-exempt organization, as its president and chief executive officer from 2014 through December 2022. On Nov. 14, 2023, Reynolds 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, of St. Joseph, pleaded guilty on April 2, 2024, to the same charges and is awaiting sentencing. McGinnis co-founded Medical Cost Sharing and served as its chief operating officer from 2014 through December 2022.

Reynolds and McGinnis admitted that they used false and fraudulent promises to market Medical Cost Sharing as a “Health Care Sharing Ministry” to defraud hundreds of members. They collected more than $8 million in member “contributions,” yet paid only 3.1 percent in health care claims, personally profiting from the majority of the members’ contributions.

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

They marketed Medical Cost Sharing as a “Christian Health Care Sharing Ministry” through insurance brokers, radio stations, social media, and its website. The organization’s sales materials promoted its 501(c)(3) tax-exempt designation, claiming it differed from for-profit health insurance. The Medical Cost Sharing website stated, “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.”

Medical Cost Sharing promised its members that if they paid monthly “contributions,” their claims would be paid after meeting their “personal responsibility” (deductible). However, Reynolds and McGinnis admitted that Medical Cost Sharing rarely paid members’ health care claims. Sometimes, they would pay a part of a claim if the member filed a complaint with their state attorney general or hired an attorney.

Medical Cost Sharing paid no claims at all for almost two years, from Feb. 22, 2021, through December 2022, while collecting nearly $1.2 million in dues during this period.

On Dec. 13, 2022, federal agents served search warrants on the Medical Cost Sharing business location and the residences of Reynolds and McGinnis, seizing property generated from Medical Cost Sharing proceeds. Despite this, the organization continued to try to collect membership dues. On Dec. 27, 2022, the court issued a temporary restraining order prohibiting Medical Cost Sharing, Reynolds, and McGinnis from continuing their fraudulent scheme and from processing member payments.

Reynolds also admitted to filing a tax return in 2019 that claimed he had no taxable income, although he actually received at least $354,292 in taxable income that year. According to court documents, he filed false federal and state tax returns for 2018, 2019, 2020, and 2021.

Furthermore, Reynolds defrauded the U.S. Treasury by applying for Covid tax credits using false information, receiving a total of $42,586 in fraudulently obtained Employee Retention Credits for tax year 2021.

The case was prosecuted by Assistant U.S. Attorneys Kathleen D. Mahoney, Patrick Daly, and John Constance. It was investigated by the FBI and IRS-Criminal Investigation.

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