A county environmental regulator has fined Boring Company, Elon Musk’s tunneling venture, nearly $500,000 after the company dumped “drilling fluids” into manholes around Las Vegas, which led to “substantial damage” to the broader county’s infrastructure, according to a notice of violation sent to the company last week.

Clark County Water Reclamation District (CCWRD) claims that, this summer, Boring Company employees refused to stop dumping drilling fluids when inspectors arrived at its project site near the center of town and directed them to stop, according to the violation. The next day, Boring apparently “feigned compliance” only to continue dumping the wastewater after a company manager “assumed district inspectors had departed the property,” according to a cease-and-desist letter. CCWRD says that its crews ultimately had to clean 12 cubic yards of “drilling mud, drilling spoils, and miscellaneous solid waste” from one of its sewage treatment facilities due to Boring’s discharges across two of its project sites, according to the notice of violation, which was obtained by Fortune via a records request.

The drilling fluids and spoils noted in the citation appear to refer to the toxic liquid that collects in the bottom of the tunnels as Boring’s machinery drills through earth and rock—liquid which can contain a variety of chemicals including MasterRoc AGA 41S. Many Boring workers have gotten burned by these chemicals when their skin was directly exposed to them.

The new fines and allegations are the latest controversy to flare up around Boring Company. The company has on several occasions been accused by employees and regulators of skirting safety protocols or regulations as it constructs a network of tunnels below Las Vegas that the company says will serve as an “underground highway” for Teslas to zip through.

The Clark County water agency said that Boring Company’s actions had violated federal laws and regulations, and told Boring it was issuing $493,297.08 in fines, including $131,297.08 for the district’s expenses to remedy the fluid dumping. CCWRD said the fine was due to “the egregious nature of the violations, the substantial damage to district infrastructure, the district emergency resources expended responding to the Violations, and [Boring Company’s] acknowledgement of responsibility for the Violations,” according to the notice of violation. CCWRD has only issued a fine greater than $100,000 to one other company for wastewater discharge in the last three years, according to other documents obtained by Fortune in a separate records request.

The violation records show that several Boring Company executives attended a hearing with CCWRD at the end of September and that Boring Company acknowledged responsibility and agreed not to expand Boring’s operations to new drilling locations “until certain conditions were met.”

Boring Company did not respond to multiple requests for comment. A spokeswoman for the Las Vegas Convention and Visitors Authority, which pays Boring to operate the tunnel system below the Convention Center, said the agency was still reviewing the documents and declined to comment further.

CCWRD says the agency began to look into the dumpings after an anonymous complaint that was sent to the state’s environmental regulator on Aug. 12. Inspectors at CCWRD went out to the project site and confirmed that drilling fluids and spoils were “actively” being discharged into two on-site cleanouts (capped pipe fittings that connect to sewer lines), as well as into two manholes, and that there was “extensive damage to the District’s infrastructure” as a result, according to the documents. CCWRD says that “TBC staff refused” to stop dumping the fluids when inspectors told them to stop.

The next day, on Aug. 14, inspectors returned and again instructed Boring Company employees to stop discharging. CCWRD says that Boring’s superintendent, Filippo Fazzino, “feigned compliance” and removed connections to on-site cleanouts, but the regulators says that he immediately replaced them “after he assumed District inspectors had departed the Property,” according to a cease-and-desist letter that was sent to Boring later that day.

“Notably, Mr. Fazzino attempted to minimize the extent of the discharge by falsely claiming that the discharge was initiated only the night before—contrary to the District’s inspection records from the day prior. TBC’s brazen refusal to stop its illicit discharges after being caught in the act, coupled with TBC’s representative’s false statements to District inspectors, proves TBC’s activities to be knowing and intentional,” the cease-and-desist letter wrote.

Fazzino did not respond to multiple requests for comment.

In a letter Boring sent to CCWRD Aug. 15, the day after the second inspection, Boring’s director of legal affairs acknowledged that “water was improperly discharged to the sewer system,” that it was investigating the matter, and that the company had taken certain actions as a result, including physically disconnecting certain sewage connections and sealing leaks in its tunnels.

One current Boring Company employee, who spoke with Fortune on the condition of anonymity for fear of reprisal, confirmed that, while the company is required under county rules to pretreat water and fluids before disposing of it, Boring Co. workers were pumping it directly into the sewage system without pretreating it.

Founded in 2017, the Boring Company is a lower-profile venture in Musk’s empire of moonshots, though no less ambitious than his rocket startup SpaceX or brain chip operation Neuralink. The idea for Boring is to eliminate traffic by digging tunnels below cities that can shuttle passengers with autonomous Teslas. Boring has raised more than $900 million in funding from some of Silicon Valley’s top investment firms such as Sequoia Capital, according to PitchBook, though it has struggled with delays and employee safety incidents.

Boring has made the most progress in Nevada, where a 4-mile stretch underneath the Las Vegas Convention Center is currently the lone working example of Musk’s vision. But the company has had several brushes with regulators in the state. In September, Nevada’s Bureau of Water Pollution Control fined the company nearly $250,000 for violating environmental regulations nearly 800 times in the last two years, including for spilling untreated groundwater onto public roads and not reporting it to authorities, ProPublica first reported. Boring had previously entered into a settlement agreement in 2022 with the regulator for similar violations.

In June 2023, Boring Co. exposed the foundations of two pillars supporting Las Vegas’s elevated monorail while searching for an irrigation pipe, Fortune reported in April 2024. Regulators ordered the active monorail to temporarily halt operations for a day, with Boring workers exposing the base of another column a few months later. Clark County issued three violations related to the two incidents, accusing Boring Co. of doing work without a permit and creating a potential hazard.  (Boring Company, at the time, didn’t respond to a request for comment. The LVCVA said that “TBC was fixing a broken irrigation line and inadvertently exposed a Monorail foundation, so we took the correct steps to repair that, including pausing operations for a day.”)

Boring has also dealt with investigations from Nevada’s Occupational Safety and Health Administration, including eight citations in 2023 that Boring is still contesting. According to those citations, many employees have been burned by the chemicals in the liquid that pools up in Boring’s tunnels. (Boring is disputing these violations and will defend itself in an upcoming hearing)

Are you a current or former Boring Company employee with thoughts on this topic? Have a tip to share? Contact Jessica Mathews at [email protected] or [email protected], or through the secure messaging app Signal at jessica_mathews.36. You can also contact her on LinkedIn.

More coverage from Fortune on the Boring Co.:
—Tunneling halted at Boring Company job site in Las Vegas after ‘crushing injury’ of worker reported
—The CEO of the Las Vegas agency behind Boring Company’s first tunnel system says his team will be ‘more involved’ after safety incidents
—‘We have consistently flirted with death’: Elon Musk wanted the Boring Co. to build a tunnel system below Las Vegas. Former employees say they feared for their lives while working there

This story was originally featured on Fortune.com