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Feds shut down Missouri nonprofit that stole $7.5 million from members

por John R. Fischer, Senior Reporter | February 24, 2023
The FBI and Justice Department shut down Medical Cost Sharing, a Missouri nonprofit scam that stole $7.5 million from its members.
A Christian nonprofit is no more after it was revealed to have collected $7.5 million in membership fees but only put an estimated $246,000 (3.5%) of that money toward the cost of its members’ healthcare bills.

Federal authorities shut down Medical Cost Sharing, a healthcare sharing ministry founded in 2013 in St. Joseph, Missouri, whose members agreed to pay a fee with the total sum meant to go toward unexpected medical expenses. Some paid monthly premiums of up to $750, according to the Kansas City Star.

The FBI and Justice Department said MCS was a fraud scheme that denied legitimate medical claims “based on a variety of specious reasons,” with founders James L. McGinnis and Craig Reynolds luring in “like-minded Christians” for a decade. The two spent the majority of funds on non-healthcare-related matters, pocketing at least $4 million into personal bank accounts, which they failed to disclose on their IRS tax forms.
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Complaints ignored for years
Complaints against the organization stretch back years, according to The Star. At least seven individuals from Missouri, Georgia, California and Texas told the FBI that they received expensive medical bills from providers after joining the charity, with one man billed $67,000 for kidney stones, and a woman, $125,000 for stroke care.

MCS told them their plans would cover all preexisting conditions. But when they complained about the bills, the charity told them they were responsible for negotiating with the hospital and accused them of lying about their health history.

In December 2022 the feds raided and seized McGinnis’ and Reynolds’ properties, including their homes and an office space, saying the properties were bought as a result of a wire fraud and money laundering conspiracy.

“It’s ridiculous. I mean, it’s been five or six years now, and the feds are just now getting involved?” Texas pastor Jeff Gore, who paid $4,000 in membership fees but never received compensation for care, told The Star.

Recouping losses
District Judge Greg Kays issued a preliminary injunction against the charity, stopping it from doing any business, including maintaining its website, until further notice, based on sufficient probable cause of “ongoing fraudulent conduct in violation of the wire fraud statute.”

He also ordered it to keep all records of its business dealings, stop enrolling members to the program or soliciting others, and stop collecting dues from current members.

McGinnis and Reynolds deny that they or Medical Cost Sharing committed fraud. Neither man has been criminally charged.

The attorney general’s office would not disclose the number of complaints made but told the Star that it is currently involved in active mediation between consumers and MCS, with some complaints already resolved.

“We encourage any Missouri consumers who feel they’ve been defrauded by this company to reach out to our office, and we’d be happy to look into their specific complaints,” said Madeline Sieren, spokeswoman for Missouri Attorney General Andrew Bailey.

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