Elon Musk’s Boring Company is facing nearly half a million dollars in fines after Clark County regulators say the tunneling firm repeatedly dumped drilling fluids into manholes and sewer cleanouts across two Las Vegas project sites, causing what the county described as “substantial damage” to public infrastructure.

According to a notice of violation issued by the Clark County Water Reclamation District (CCWRD), inspectors were first alerted to possible illegal discharges through an anonymous complaint on August 12. When CCWRD staff arrived on site that day, they reported seeing drilling fluids and spoils “actively” being pumped into two manholes and two on-site cleanouts connected to the sewer system. The agency says its inspectors instructed Boring employees to stop but were refused.

The fluids cited in the documents are the same slurry-like mixture that collects at the bottom of tunneling operations, often containing chemicals used in boring processes, including MasterRoc AGA 41S. Workers at the company have previously reported chemical burns from exposure to these substances.

The following day, on August 14, inspectors returned and again ordered the company to halt discharges. CCWRD says Boring’s superintendent, Filippo Fazzino, initially disconnected the equipment but reattached it “after he assumed District inspectors had departed the property.” A cease-and-desist letter issued that afternoon said Fazzino “attempted to minimize the extent of the discharge” and gave inspectors false information about when the dumping began.

“[The] refusal to stop its illicit discharges after being caught in the act, coupled with [the] representative’s false statements, proves [Boring Company’s] activities to be knowing and intentional,” CCWRD wrote in the letter.

In all, CCWRD crews cleaned out approximately 12 cubic yards of drilling mud, spoils, and solid waste from one of the district’s treatment facilities. The agency assessed a total penalty of $493,297.08, which includes more than $131,000 for cleanup costs. Officials said fines of this size are rare, noting in separate documents that only one other company had been fined more than $100,000 for wastewater violations in the past three years.

A letter sent by Boring Company’s director of legal affairs on August 15 acknowledged that “water was improperly discharged to the sewer system” and said the company was investigating the incident. The letter also noted that Boring had taken steps to disconnect certain lines and seal tunnel leaks following the inspections.

A current Boring employee, speaking to Fortune on condition of anonymity, confirmed that workers had pumped fluids directly into the sewage system without pretreatment, despite county rules requiring it.

Boring Company did not respond to multiple requests for comment.

A Pattern of Regulatory Scrutiny

This is not the first time Boring Company has drawn attention from Nevada regulators. The firm, founded in 2017 and backed by more than $900 million in venture capital, has made Las Vegas the center of its tunneling ambitions. Its loop beneath the Las Vegas Convention Center remains the company’s only operational passenger tunnel.

But the company has also faced repeated violations:

• September 2023: Nevada’s Bureau of Water Pollution Control fined Boring nearly $250,000 for environmental violations reported nearly 800 times over two years, including discharging untreated groundwater onto public roads.
  
  
• 2022: Boring entered into a settlement with the same regulator over similar issues.
  
  
• June 2023: Boring workers exposed the foundations of two supporting columns of the city’s monorail while attempting to locate an irrigation pipe. Regulators ordered a temporary shutdown of monorail service, and Clark County later issued multiple violations.
  
  
• 2023: Nevada OSHA issued eight citations related to worker chemical burns and safety concerns. Boring is contesting those violations.

At a late September hearing with CCWRD, several Boring Company executives attended and acknowledged responsibility for the sewer dumping violations. The agency says Boring agreed not to expand its drilling operations to new sites unless certain conditions were met.

The Las Vegas Convention and Visitors Authority, which pays Boring to operate the tunnels beneath the Convention Center, said only that it was reviewing the documents.

Founded with the goal of reducing traffic by creating high-speed underground tunnels for autonomous Teslas, the Boring Company is one of Musk’s more experimental ventures. While high-profile projects in other cities have stalled, the Las Vegas system has delivered the company its most visible progress—along with intensive regulatory oversight.

The latest violation adds to that list. With cleanup costs, penalties, and a growing record of environmental and safety concerns, the company’s Nevada ambitions continue to unfold under the watchful eye of state and county regulators.

Whether the latest enforcement action leads to meaningful operational changes remains to be seen. As of this week, CCWRD’s cease-and-desist order remains in effect, and county officials say compliance will be closely monitored.