New York City, NY – Advocates in the construction industry are raising alarms over what they claim is a growing trend of fraudulent injury claims on job sites, potentially costing businesses millions in insurance settlements.

As one of the busiest cities for construction, New York City has reportedly become a hotspot for alleged fraud schemes, according to representatives from the construction and insurance sectors.

"It isn't a victimless crime," said Don Orlando of Tradesman Program Managers, an organization representing property owners and contractors, in a statement to ABC News. "These are small businesses that are getting victimized."

Orlando and others allege that many reported job site injuries are fabricated, with surveillance footage capturing incidents that raise suspicions.

Orlando described one such instance, saying he had a video of a man who “just sat down” before claiming he had fallen. According to him, the man later filed a lawsuit alleging head and limb injuries.

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

However, some attorneys and worker advocates argue that the claims of widespread fraud are exaggerated.

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

Industry Veteran Speaks Out

Steve Katz, a veteran in the construction field with 50 years of experience, said he started noticing questionable claims nearly a decade ago.

One of his employees once claimed a workplace fall, but a doctor cleared him to return to work. Yet, Katz said the employee never returned, 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 recounted another case where a worker sued him after allegedly falling, but another employee later told him the fall had been staged. Since then, Katz claims he has faced multiple similar lawsuits.

According to him, these claims drive up the cost of doing business, with expenses ultimately passed down to clients.

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

Dispute Over Insurance Rates

Warywoda, whose firm represents injured workers, pushed back against the argument that fraud is driving up insurance costs.

"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?" he asked. "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."

Recent investigations have added fuel to the controversy. WABC-TV found that multiple plaintiffs in construction injury lawsuits lived in the same apartment buildings, raising questions about potential fraud.

Michelle Rafield, executive editor for the Coalition Against Insurance Fraud, pointed to statistical improbabilities.

"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," she told ABC News.

Allegations of Larger Fraud Networks

Orlando claims that undocumented migrants are being recruited to participate in fraudulent claims, with some doctors and lawyers allegedly involved in orchestrating fake accident reports and unnecessary surgeries.

Tradesman has taken legal action, filing federal lawsuits against more than 100 defendants, including law firms and medical professionals, accusing them 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 dismissed the allegations as an industry-driven narrative designed to weaken worker protections.

"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. "It's about putting profits over people."

Originally reported by Workers Compensation.