Founder of Medical Cost Sharing Pleads Guilty to Fraud

Craig Reynolds, founder of Medical Cost Sharing (MCS), pleaded guilty to wire fraud conspiracy and making false statements on his tax return. Reynolds, 61, admitted to defrauding MCS members of more than $8 million, with his business partner James McGinnis using $5 million of that amount for personal purposes. The FBI revealed that patients who donated thousands of dollars were later denied coverage for their medical expenses. MCS spent only about 3% of its $8 million revenue on payments to donors, or approximately $250,000.

One member paid nearly $11,000 in membership dues to MCS but received no funds to cover her $125,000 medical bill after suffering a stroke and being flown to a hospital. MCS accused her and other members of lying about preexisting conditions, thereby disqualifying them from coverage. Similarly, women who were pregnant were denied coverage for medical bills, allegedly due to false claims about not being pregnant.

Reynolds faces up to 23 years in prison and must pay restitution and forfeit all gains from MCS donors, including his motorcycle. Fraud in the unregulated health share ministry has been a subject of scrutiny, with MinistryWatch and comedian John Oliver previously highlighting the issue. Some 1.5 million Americans rely on more than 100 health share ministries, paying regular membership “donations” to groups that pledge to cover medical expenses but are not legally obligated to do so.

Fraudsters have exploited this market, using churchy-sounding names to market sham ministries that leave donors responsible for medical bills. Aliera, which operated Trinity Healthshare, went bankrupt and was found guilty of fraud last year. Ohio-based Liberty HealthShare has settled a $1 million lawsuit and faces other legal action. The lack of federal regulation means it is up to states to police health share groups, with a handful of states taking action.

In March, North Dakota reached a settlement with Jericho Share, which opened in 2021 and by 2022 had generated hundreds of consumer complaints. The Christian health share industry remains largely unregulated, with leading groups advocating to keep it that way. The Alliance of Health Care Sharing Ministries, the industry trade group, continues to oppose increased oversight.

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