Construction Industry Advocates Say Accidents Being Faked in NYC

New York City, NY (WorkersCompensation.com) - Construction industry advocates in New York City are alleging that construction workers are faking their job site injuries in an effort to get a big insurance settlement.

As one of the cities with the most construction ongoing, New York City has also become the location of some of the latest fraud schemes, some representatives of the construction and insurance industry said recently.

"It isn't a victimless crime," Don Orlando of Tradesman Program Managers, an organization that represents property owners and construction contractors, told ABC News, recently. "These are small businesses that are getting victimized."

Tradesman said hundreds of construction site incidents aren’t injuries at all, but a widespread conspiracy of faked injuries. And, he said, security and surveillance cameras are getting some of the alleged falls on camera.

Orlando said he had video of a man who “just sat down,” but claimed he had fallen, as an ambulance was on its way. According to Orlando, the man claimed he’d suffered head and limb injuries in a lawsuit.

"That $200 or $300 investment in that camera saved that employer millions of dollars," Orlando said.

But some attorneys and other worker advocates said the claims of fraud were being blown out of proportion.

"If there was this rampant fraud going on, these cases would be dismissed by a judge or a jury," Nicholas Warywoda, a personal injury attorney told ABC News. "That's just not happening."

One man in the construction industry said the industry has changed in the last five years. Steve Katz, who has been part of the construction industry for the past 50 years, said his concerns started nearly a decade ago when one of his employees claimed to have fallen at work. Katz said he took the employee to a doctor, who said the employee was fine and could return to work. But the employee never came back to work, Katz said, and his insurance company paid out $3.6 million.

"That's when I went crazy," Katz said. "I found out that I wasn't the only one. My competitors told me they were all getting hit with these fake falls."

Katz said two years later, another worker alleged he’d fallen on one of Katz’s properties in a lawsuit. But Katz heard from another worker that the “injured” worker had said he was planning the fall in advance, and that he had offered to teach other employees how to fall to file their own lawsuits. Since then, he said, he’d been sued another eight times in similar lawsuits.

The cost of those lawsuits, he said, was passed on to customers. And, he said, the fraudulent claims are impacting insurance companies throughout the U.S., not just in New York City.

"We just raise our rates. The insurance companies raise their rates, and the cost of doing work skyrockets,” he said.

But Warywoda, whose firm often represents injured workers, said if construction accident insurance fraud were happening, the claims would be dismissed by judges and juries. He dismissed the notion that insurance companies are raising their rates across the country because of fraudulent claims.

"If this was true, then why are the insurance companies not showing the proof that it's actually lawsuits that are raising premiums and insurance costs?" Warywoda said. "One could say if the owners of the construction sites would just provide the appropriate safety measures that they're required to, there wouldn't be as many lawsuits.”

The allegations of fraud have led to increased scrutiny on lawsuits filed by people claiming to be construction workers hurt on job sites.

WABC-TV found in an investigation of some of the lawsuits, that in one apartment building in the Bronx, 30 plaintiffs who claimed to have been injured on the job all lived in the same apartment building, while six people in a six-unit apartment building in Queens said in court documents they had been injured on the job at construction sites. ‘

"If you think about it, the law of averages tells you it's really unlikely that there's going to be this large number of people living at the same address, who are all in the same business, work for the same employer, have the same injury, have the same medical treatment and are going through the exact same things," Michelle Rafield, the executive editor for Coalition Against Insurance Fraud, told ABC News.

Tradesman’s Orlando said undocumented migrants are being recruited to participate in the fraudulent claims. He said some doctors and lawyers are in on the scheme too, and that after construction accidents are reported, the migrants undergo unnecessary surgeries and become plaintiff in slip and fall lawsuits.

Tradesman has filed lawsuits to take on more than 100 defendants, including law firms and doctors, to federal court on accusations of racketeering.

"It's morally wrong," Orlando said. "Take out the fraud element. You're taking advantage of someone who's deprived as it is, and America is supposed to be the land of opportunities."

Warywoda and other attorneys said the allegations have no merit.

"The insurance industry and the industry lobby are very wealthy and very strong. They're doing everything they can to tarnish and to change the civil justice system, which is only going to make it less safe for construction workers," Warywoda said. He isn’t one of the attorneys accused in Tradesman’s lawsuits. "It's about putting profits over people."

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