'It’s morally wrong': Construction industry advocates say accidents are being faked all over New York City

With more high-rise buildings than anywhere else in the U.S., New York City has long been a place where millions of people hope to achieve the American dream through careers in the construction industry.

While scores of construction workers are spending hours each day building the city's newest apartment buildings, office towers and restaurants from the ground up, these properties have also become the locations of the city's latest fraud scheme, according to some representatives of the construction and insurance industries.

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

Orlando alleges that hundreds of construction site incidents involving reported injuries were actually staged as part of a widespread conspiracy -- and he said surveillance cameras are capturing some of these alleged fraudulent falls.

He pointed to a video that he says shows a man who "didn't fall" and "just sat down" while an ambulance was on its way. The man filed a lawsuit claiming head and limb injuries, according to Orlando.

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

Others said these claims are being blown out of proportion.

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

'The cost of doing work skyrockets'

Steve Katz has worked in the construction industry in the New York metropolitan area for more than 50 years, but said the last few years have been unlike anything he has ever experienced.

According to Katz, his concerns over fraud started eight years ago when one of his employees claimed to have fallen from a fire escape. After doctors said the employee was fine and could return to work, the man never came back, according to Katz, adding that his insurance company settled for $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."

Two years later, Katz said another construction worker sued him, alleging a fall on one of the properties where Katz's crews were working. However, Katz said the employee's colleagues told him that the employee told them that he was planning the fall in advance and was willing to teach them how to fake falls as well.

"Since then, I've had a total of eight of these phony lawsuits," Katz said, adding that the extensive costs associated with fraudulent claims are being passed along to customers.

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

Orlando explained that fraudulent construction accident cases can have financial implications for insurance customers throughout the U.S., even outside the nation's largest city.

"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, whose firm frequently represents construction workers injured on construction sites in New York, 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," he added.

One address, multiple lawsuits

Allegations of widespread fraud have caused increased scrutiny on lawsuits being filed by people claiming to be construction workers who were hurt on job sites.

In New York City's outer boroughs, miles from the high-rise towers of Midtown Manhattan, reporting by ABC station WABC-TV found some claims coming from multiple people living at the same address.

One apartment building in the Bronx was home to 30 plaintiffs, while a two-story building nearby was listed as the home of 21 plaintiffs, according to WABC-TV's report. In Queens, at least half a dozen people living in a six-unit apartment building said in court documents that they were 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.

Orlando's company, Tradesman, claimed undocumented migrants are being recruited to participate in the scheme.

"They're told, 'Listen, we can teach you how to make millions. This is all you have to do. You have to fake a fall on a construction site,'" Katz said.

Katz and Orlando claim that some doctors and lawyers are in on the scheme, and that after the construction accidents are reported, the migrants undergo unnecessary surgeries and then become plaintiffs in slip-and-fall lawsuits

"I would call the plaintiffs in this case victims, because they are the ones being taken advantage of," Orlando said.

Tradesman has now filed lawsuits of its own, taking over 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."

Attorneys for dozens of the defendants say the allegations have no merit and that they intend to seek dismissals of the claims against them.

"The insurance industry and the industry lobby is 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, who isn't among those accused in Trademan's lawsuits, said. "It's about putting profits over people."