A8981/S8413 would make staging a construction site accident a Class E felony.
Staged Accidents bill A8981/S8413, that would make staging a construction site accident a Class E felony, was introduced by State Senator Neil Breslin and Assemblyman David Weprin at a press conference in Albany on March 5th. A coalition of organizations stood in support.
This proposed legislation is key to halting the rampant epidemic of fraudulent claims that threatens to cripple New York City on multiple levels.
A coalition of organizations stood in support of the Staged Accidents bill A8981/S8413 introduced by State Senator Neil Breslin and Assemblyman David Weprin on March 5th at a press conference on the steps of the iconic Million Dollar Staircase at the State Capitol in Albany. - PHOTO: Gotham Government Relations LLC
In its annual (2023) Construction Safety report, the NYC Department of Buildings highlights a concerning trend: Despite the decline in violations and Stop Work Orders issued by the Department —a clear sign of more sites operating in compliance— worksite injuries are on the rise for a third straight year, increasing by 25 percent compared to 2022. Coinciding with the increase in reported injuries, is an increase in injuries that are investigated and where no safety violations are found.
Multi-year data collected by insurance investigators, underwriters, and legal teams, unveils a troubling nexus of staged accidents and fraudulent claims, the result of the growing exploitation of New York State Labor Law §240/241 (the Scaffold Law), which holds contractors and property owners strictly liable for any “gravity-related’ incident.
A distinguishing characteristic of the Staged Accidents bill is that it targets not only the claimants, but anyone who “directs, hires, requests, encourages, orchestrates, or invites another individual or individuals to stage a construction site accident.” The legislation encompasses all the bad actors – corrupt doctors, lawyers, and the crime syndicates.
GRAPHIC: The Lawsuit Reform Alliance of NY
Press Conference Highlights
The press conference introducing A8981/S8413 highlighted the need for the proposed legislation to combat:
Inflated insurance premiums for construction projects and housing that are passed down to consumers in prohibitive costs.
Involvement of organized crime syndicates. These bad actors exploit vulnerable individuals, often migrant workers, seek to manipulate the legal system, and delay construction projects.
Worsening of the housing affordability crisis. Bogus claims cause construction costs to zoom upward which “trickles down” and makes affordable housing more and more of a misnomer as housing prices become prohibitive for a broadening segment of the City’s population.
Andriana Vamvakas, president of Andromeda Advantage, on The Legal Lowdown with Imran H. Ansari, Esq.
ENDORSEMENTS AND OPPOSITIONS
In his May 6th letter to Senator Breslin, Michael E. McMahon, the Richmond County District Attorney and President of the District Attorneys Association of the State of New York (DAASNY), supports legislation aimed at closing a loophole in existing insurance fraud laws. McMahon points out that current New York law does not explicitly prohibit the staging of construction-site accidents, allowing some organizers of such fraudulent acts to avoid liability. The proposed bill would address this gap by holding those who orchestrate staged construction accidents for false insurance claims directly accountable.
The Building Trades Employers’ Association (BTEA), representing over 1,200 union construction managers, general contractors, and specialty trades subcontractors in New York, expressed its support for legislation S8413A/A8981. In its May 14 letter addressed to Majority Leader Stewart-Cousins, Speaker Heastie, Senator Bailey, and Assembly Member Dinowitz, the BTEA highlights that insurance costs in New York are more than triple those in neighboring states, largely due to the Scaffold Law, but also significantly exacerbated by fraudulent construction accidents. These fraudulent activities lead to increased workers’ compensation and general liability insurance costs, affecting contractors and contributing to New York’s affordability crisis by inflating costs across the economy. Recognizing the staging construction accidents for the purpose of insurance fraud for the crime that it is will be a step in the right direction which the BTEA supports.
The New York State Building and Construction Trades Council (NYSBCTC), representing over 220,000 unionized construction workers through various councils and unions, strongly opposes legislation S8413/A8981. The NYSBCTC argues that this bill is unnecessary since existing penal laws already cover such insurance fraud. They contend that the bill is driven by the insurance and business communities to undermine the Scaffold Law. The NYSBCTC emphasizes that construction workers often face hazardous conditions and targeting them with potential criminal charges for workplace accidents is unjust. They believe that existing laws sufficiently address insurance fraud without singling out construction-related incidents, and therefore, urge the legislature to reject the bill.
The New York State AFL-CIO, representing 2.5 million union members, retirees, and their families, opposes legislation S8413/A8981. They argue that the bill is an attempt by the financial services industry to intimidate workers and discourage valid workers’ compensation and Scaffold Safety Law claims. The AFL-CIO asserts that the legislation is unnecessary because insurance fraud is already covered under Article 176 of the Penal Law. They emphasize that the Scaffold Safety Law is crucial for holding employers accountable for worker safety by requiring proper equipment and instruction on construction sites. The AFL-CIO views this bill as an effort to undermine worker safety protections and urges the legislature to reject it.
The New York Committee for Occupational Safety and Health (NYCOSH) opposes legislation S8413A/A8981, which seeks to criminalize the staging of construction accidents. NYCOSH argues that insurance fraud is already addressed under Article 176 of the Penal Law, making this bill unnecessary. They contend that it would deter workers from reporting genuine job-related injuries or fatalities, especially in the inherently dangerous construction industry. NYCOSH, a non-profit advocating for workplace safety through education and advocacy since 1979, emphasizes that many workers, particularly vulnerable groups like Latinx immigrants, already hesitate to report safety concerns or file workers’ compensation claims due to fear of retribution. Highlighting the disparity between the high number of recorded workplace injuries and the significantly lower number of workers’ compensation claims in New York State, NYCOSH believes this legislation would exacerbate workers’ reluctance to report injuries. They urge the government to build trust in vulnerable communities instead of advancing this bill and recommend voting against it.
The Construction Workforce Project (CWP), a nonprofit advocacy organization collaborating with various community groups and industry leaders, strongly supports legislation S8413A/A8981. This bill aims to classify the staging of construction site accidents for insurance fraud as a Class E felony. CWP highlights that open/merit shop workers, who comprise about 80% of private developments in New York City, are predominantly Black and Latino, with 87% of the workforce being minorities and 82% residing in the five boroughs. CWP emphasizes the critical need for this legislation due to the alarming increase in staged construction site accidents, which exploit the workers’ compensation system and harm workers, particularly non-English speaking individuals. These fraudulent schemes, often orchestrated by criminal organizations, force workers into false claims and unnecessary surgeries, jeopardizing their health and financial stability. The legislation seeks to dismantle these fraudulent activities, holding accountable those who exploit vulnerable workers and ensuring timely medical and financial support for genuinely injured workers. By addressing fraud, the bills aim to improve the overall integrity of the construction industry and support New York’s efforts to manage its housing affordability crisis. CWP commends the bill sponsors for their efforts to enhance worker protection and promote an ethical construction sector.
“It’s The Good Guys Against the Bad Guys and Right Now the Bad Guys Are Winning”
NYS State Senator Neil Breslin, chairman of the Senate Committee on Ethics and Internal Governance and Insurance, quoted in an article in The Daily Gazette of Schenectady on March 8 said, “This kind of crime [staged accidents and fraudulent claims] must be met with severe punishment” as its harm casts a wide shadow.
“Contractors and developers have become burdened with exorbitant insurance premiums, which are ultimately passed down to consumers and result in higher housing expenses for all New Yorkers.”
He quoted sobering statistics:
Workers compensation premiums increased an average of over 10% in 2022, outpacing the rate of inflation.
Insurance premiums in New York are 400% high than the national average.
Breslin summed up the crisis in stark terms: “It’s the good guys against the bad guys and right now the bad guys are winning.”
A GROWING COALITION
The coalition of organizations standing in support of the Stage Accidents bill is expanding and includes:
The Business Council of New York State
The Associated General Contractors of New York State
National Federation of Independent Business
The Empire State Chapter of the Associated Builders and Contractors
New York Insurance Association, Inc.
The Long Island Builders Institute
The Lawsuit Reform Alliance of NY
Northeastern Subcontractors Association, Inc.
and many more add their support daily.
In May the coalition met with many elected officials, including Majority Leader Andrea Stewart-Cousins' office and Deputy Majority Leader Michael Gianaris.
As of 5/16/2024 co-sponsorship of the bill spreads among Democrats and Republicans.
A8981 – Sponsor Weprin
Co-sponsors: Ardila, Hyndman, Lucas, Pretlow, Zebrowski, Lavine, Blumencranz, Bendett, McGowan, Dinowitz, Thiele, Dickens.
Multisponsor: Levenberg
S8413 – Sponsor Breslin
Co-sponsors: Jacob Ashby
George M. Borrello
Patricia Canzoneri-Fitzpatrick
Patrick M. Gallivan
Andrew J. Lanza
Jack M. Martins
Mario R. Mattera
Dean Murray
Thomas F. O'Mara
Anthony H. Palumbo
Rob Rolison
Luis R. Sepúlveda
James Tedisco
Help Make Staging A Construction Site Accident A Felony
The Empire State Chapter of Associated Builders and Contractors (ABC) urges its members to support this legislation that would make staging a construction site accident a Class E Felony and allow prosecution of the individuals faking the accident on the site and the nefarious doctors and lawyers who perpetuate this fraud. ABC has set up a site for supporters asking elected officials to sponsor S8413/A8981.
650 Fraudulent Insurance Claims in Four Years
A lawsuit filed by Tradesman Program Managers (TPM) and Roosevelt Road Re, a reinsurer and TPM’s general program managing agency, based on the insurer having received over 650 fraudulent claims in the last four years.
A brief introducing the lawsuit says, “dozens of local lawyers, doctors and others” have caused the firm’s insurance premiums to skyrocket. The firm filed a federal RICO (Racketeer Influenced and Corrupt Organizations Act) lawsuit in the Eastern District of New York against “attorneys, medical providers and others who we believe may have contributed to these activities.”
It continues, “We have uncovered information suggesting a systemic affront to the judicial process that has in essence ‘hijacked’ both the New York construction and habitational markets” costing customers of the insurer billions.
The brief explains that undocumented migrant laborers are being groomed and coerced into participating in criminal schemes. They are given counterfeit IDs, aliases, stolen or fake SST cards and other falsified documents to gain employment with construction companies. Invalid OSHA safety training cards are illegally issued by training classes sponsored by entities seeking to exploit the workers, contractors, and contractors’ insurers.
Federal identity theft, mail fraud, wire fraud and bank fraud perpetrated by these bad actors have, according to TPM and Roosevelt Road Re, resulted in an “an existential crisis” that, if unabated, “will result in the collapse of important stakeholders.”
Preying Upon Vulnerable Spanish-Speaking Immigrants
WABC-TV Channel 7 Eyewitness News covered fake falls in a segment last November that was reported in SKYlines #47. This year, Kristin Thorne followed up with two segments that aired on March 16th and April 2nd and appeared on the station’s website.
The first TV segment noted that corrupt medical providers and lawyers are preying upon “vulnerable primarily Spanish-speaking immigrants to engage in the fraud” which heaps profit on those orchestrating the faked incidents. Attorney Kirk Willis, interviewed on the program, said, “They train the migrants how to act at some of these staged accidents…”
The second segment presents a construction worker who says his identity was stolen to file false workers' compensation claim and a lawsuit.
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