Combating Staged Construction Accidents
- eva_hatzaki
- 4 hours ago
- 8 min read
Inside New York’s Fight Against Scaffold Law Fraud
By Andriana Vamvakas, CFE
President, Andromeda Advantage
"The first time the pattern stopped feeling like coincidence I knew that something larger was at work."
After 34 years as a federal investigator I followed paper trails, exposed networks, and helped secure indictments and convictions in fraud cases that involved millions of dollars. As a certified fraud examiner, I have been trained to trust patterns and to remain a natural skeptic. When I began seeing clusters of injury claims tied to the same buildings, the same doctors, the same law firms, and the same social circles the alarm bells went off. The incidents were almost identical. An allegedly injured person would report an unwitnessed construction accident, go to an emergency room, decline an MRI and then, a week later, begin medical treatment and retain legal representation from the same small set of providers and attorneys.
Claims Patterns Demonstrate Organized Behavior
What began as isolated false claims has become a citywide crisis. Since the pandemic staged construction-site accidents and fraudulent injury claims have increased roughly fivefold. These are not random opportunists looking for a quick payout. Organized criminal networks are coercing vulnerable people, often newly arrived migrants, into staging accidents or submitting inflated claims. Litigation funding frequently bankrolls the operation. Some people endure unnecessary and invasive spine and neck procedures performed by bad doctors who profit from the deception. The human cost is devastating. Individuals with very few options are exploited and see only a sliver of any recovery. In one matter the person who staged the fall received $15,000 and the remainder of the settlement went to coyotes and middlemen, leaving the participant with almost nothing after legal fees and expenses were paid.
The economic fallout is wide reaching, and the scale of exposure is staggering. Independent studies estimate that fraudulent construction injury claims and their downstream effects cost New Yorkers more than $8 billion in higher insurance premiums, increased project costs, and reduced housing affordability, i.e., higher rents and HOA’s. These schemes inflate carrying costs for developers, stall projects, and discourage legitimate investment. For example, general liability insurance can add as much as 14% to project costs compared to 2-3% across the river in New Jersey. New York sustains more claims than comparable cities, and the frequency and cost of those claims far exceed comparable markets. At the root of this problem is New York’s unique Scaffold Law, New York Labor Law sections 240/241, which combines strict liability with gravity-related incidents.
That framework, exploited by organized networks, creates an almost built-in incentive for fraud. To defend against these claims requires extraordinary measures, and is left unchecked, this dynamic threatens the city’s housing, infrastructure, and competitiveness.
Photos: Roosevelt Road
Jobsite footage shows a worker being carried away on a stretcher after a "fall" later alleged in court to have been staged.
How Andromeda Is Responding
At Andromeda we responded on multiple fronts and doubled down on proven investigatory techniques. We started by confronting law firms that file apparently coordinated cases. In December 2023 we asked firms handling these matters to take a second look and to review the red flags in their dockets. Many firms did and the results were striking. In one instance a firm ultimately withdrew more than 300 claims after we raised concerns. Other firms filed orders to show cause in court and withdrew as counsel. When the case moved to a second law firm we wrote to that firm as well, advising that the claims appeared suspicious. Some firms chose to withdraw, some pushed forward, and a subset of matters financed by litigation funding changed hands multiple times. In many of those later filed matters the plaintiffs failed to appear and the cases were dismissed.
We set a firm-wide mandate not to settle cases that display the badges of fraud, and we will not reward fraudulent claims. We also pursued legal and legislative remedies. In early 2024, working with Gotham Government Relations, we helped introduce the Staged Accident Bill in Albany with sponsors Assemblyman David Weprin and Senator Neil Breslin. That bill S8413/A8981 would make staging a construction-site accident a Class E felony. The objective is to protect genuine victims and for bad actors facilitating the fraud to be held accountable. The legislation targets people who exploit the Scaffold Law, to manufacture claims and to commit insurance fraud. At the federal level U.S. Congressman Nick Longworthy has introduced comparative negligence legislation that would exempt federal projects from NYS Scaffold Law. We have spent countless hours with state and federal legislators explaining how the schemes work, why they injure workers and communities, and why accountability is necessary. We provided lawmakers with documentation, case studies and detailed explanations to secure support.
On the civil side we filed three federal RICO lawsuits in the Eastern District of New York against lawyers, medical providers, runners and plaintiffs connected by family and social ties. Those complaints detail patterns of racketeering activity and specific predicate acts that sustain the networks. We have also referred numerous matters to law enforcement for criminal investigation and potential prosecution.
None of this work happens alone. We built a coalition of insurers, construction companies, employer associations and advocates to share intelligence, to stay current with the latest legislation and to plan next steps. We held press conferences in Albany and outside the U.S. District Courthouse in Brooklyn to keep public attention focused on the problem. We have been interviewed extensively by newspaper reporters and on radio programs to explain what is happening with staged accidents in the city and the exploitation of people by organized networks.
NYCDOB Documentation
The Department of Buildings 2023 annual safety report documented a substantial increase in ladder falls; stair falls and tripping incidents. It appears that the City has seen more incidents of those types that are reviewed by the department yet do not result in enforcement because inspectors find no unsafe or illegal conditions. In addition, the data do not show a clear correlation between the labor laws and improved safety. Instead, the evidence points to fraudulent activity as the primary driver behind the surge in claims.
New York remains the only state in the nation to have the Scaffold Law in its original form. The Scaffold Law dates to 1885, a time before the Department of Buildings and OSHA. Today the law too often functions as a windfall for trial lawyers who have a vested interest in maintaining the status quo and who contribute heavily to political campaigns. Repealing or reforming the statute will not solve every problem, but it will help address affordability, reduce incentives for fraud, and lessen the exploitation of people coerced into staged accidents. Illinois repealed a similar law in 1995 and subsequently reported a sharp decline in certain types of construction accident claims.
Constructive Collaboration with Industry Partners Essential
This is a critical moment for New York’s construction industry. Stopping these schemes will require sustained collaboration among the private sector, law enforcement, legislators, and the courts. I remain optimistic. When industry leaders unite with the right tools, disciplined investigation, and the will to act they can protect honest workers and legitimate developers and keep the city building.
Since Andromeda began these efforts, we have seen a measurable decline in the number of questionable claims. We remain committed to making sure real workers who are hurt receive prompt medical care and fair compensation. At the same time, we will continue to pursue bad actors and the networks that profit from this cruelty until the industry, and the public are no longer prey.
Andromeda’s Group of Companies Claims from 2012-2025
The results of our efforts are reflected in the data from our information. As shown in the chart, the number of Labor Law claims—many of which bear the badges of fraud—spiked sharply during the pandemic, peaking in 2021 as organized networks exploited the crisis and vulnerable populations. But after we implemented coordinated investigative, legal, and policy responses, the volume of these claims began to decline significantly. The trend reversed, by 2025, the number of questionable claims had dropped to levels not seen in nearly a decade. This measurable progress underscores what is possible when fraud is met with vigilance, collaboration, and a refusal to look the other way.
The number of Labor Law claims —many of which bear the badges of fraud— spiked sharply during the pandemic, peaking in 2021 as organized networks exploited the crisis and vulnerable populations. After Andromeda Advantage implemented coordinated investigative, legal, and policy responses, the volume of these claims began to decline significantly.
Insurance fraud continues to be a significant concern for the industry, impacting operational costs and premiums for policyholders. Identifying fraudulent claims requires a combination of advanced analytics, thorough investigations, and established criteria. Common indicators include inconsistent or exaggerated statements, lack of supporting documentation, repeated claims from the same individual, unusual timing or circumstances, discrepancies between the claim and known facts, description of the accident, as the incident being unwitnessed or the worker being relatively new to the employer (sometimes only having worked a day or two).
Andromeda has been hard at work coordinating with state and federal legislators on multiple fronts to modernize New York’s Scaffold Law. The stakes could not be higher: New York must remain both the construction engine and the financial capital of the world. If we do not correct these distortions, building here becomes uneconomical — and those costs ultimately fall back on renters, homeowners, insurers, and taxpayers.
In New York State
Scaffold Law Reform Bill (A6007)
Sponsored by Assemblymember Michael Fitzpatrick, this bill would bring New York off the archaic and misplaced absolute liability standard and adopt comparative negligence. That means juries could allocate fault (to workers, contractors, property owners) rather than imposing automatic liability regardless of circumstances. The goal is fairness without stripping protections from genuinely injured workers.
Assemblymember David Weprin and Senator Leroy Comrie are pushing legislation making it a felony to orchestrate or stage a construction site accident. This responds to widespread evidence of fraud rings pushing fake or exaggerated claims, driving litigation costs and insurance burdens. This bill would fill gaps in existing criminal laws.
This package aims to rein in abusive litigation funding practices. Provisions include: caps on interest or fee “advances,” prohibition of kickbacks to doctors or lawyers, required disclosures, and oversight. The objective: stop speculative funding from intensifying claim pressure and bloating settlements.
At the Federal Level
Infrastructure Expansion Act (H.R. 3548, Rep. Nick Langworthy)
This is the core federal vehicle. The bill would preempt New York’s absolute liability rule on any infrastructure, transportation, or development project that receives federal assistance, tax incentives, or is subject to federal permitting. Injured workers would continue to be protected, but projects tied to federal dollars would operate under the comparative negligence standard used everywhere else in the nation. Many observers expect this reform to be incorporated into the next surface transportation and transit reauthorization bill.
Photo: Andromeda Advantage
Andriana Vamvakas, CFE, president, Andromeda Advantage, speaks at a press conference in Albany, flanked by then NYS Senator Neil Breslin and NYS Assembly Member David Weprin, who introduced the Staged Construction Accident Bill (A3800 / S5231), in March 2024.
A critical moment for New York’s construction industry
This fraud affects every New Yorker. We estimate it costs families roughly $7,000 on average. That number is a hidden tax imposed on taxpayers and consumers every time premiums rise, work stalls or housing costs increase.
Construction costs in New York are already the highest in the nation due to the risk premium tied to absolute liability.
If left unchecked, these costs will drive developers out of the market, choke affordable housing, and force higher rents, more expensive mortgages, and rising insurance premiums.
Urban growth, infrastructure renewal, and even climate adaptation, depend on making projects feasible again.
Reform preserves protections for truly injured workers while striking at fraud, speculative litigation funding, and implausible claims.
Andromeda’s Position
We support all these reforms — Scaffold Law Reform comparative negligence bill, Weprin’s staged-accident felony measures, the litigation-funding guardrails, and Langworthy’s federal preemption on federally assisted projects. Together, they represent a balanced, structural reset, not a retreat from justice for injured workers.
We encourage all our valued clients, professionals, and stakeholders to join us in reforming this archaic, draconian, fraud-incentivizing, black-market-inducing law. New York’s Scaffold Law dates back to the 1880s — long before modern safety regulations, workers’ compensation, or OSHA protections. It is a flat-out broken relic that distorts justice, drives up costs, and undermines our city’s future. The time for change is now..🀰