According to a recent report from The Wall Street Journal, Tesla is under scrutiny over its mysterious “Project 42,” which was believed internally to involve building a glass house for Elon Musk.
The publication said, citing people familiar with the issue, that federal prosecutors are investigating whether Tesla used its own funds for Musk’s personal use, as well as the amount the company has spent, as well as its purpose, on the initiative. According to Bloomberg, the US Attorney’s Office for the Southern District of New York has subpoenaed several Tesla employees, some of whom will have to appear in court in September.
According to the Journal, the Securities and Exchange Commission has also launched an investigation into the issue; both investigations are at an early stage.
In July, the Journal reported that the project involved plans for a glass building that would be set up near Tesla’s gigafactory in Austin, Texas and would be the Tesla CEO’s residence. According to the report, concept plans show differing designs and features, but include residential elements such as bedrooms, and the project appears to be for a “dramatic glass-walled building.”
The Tesla project 42 project came under scrutiny at the company last year after an order was placed for a unique type of glass as part of the construction planning process. In an internal investigation, Omead Afshar, who heads Tesla’s Texas factory, was pinpointed, per Bloomberg reports from last year. On Wednesday, the publication further reported that federal prosecutors were seeking information related to in-house correspondence with Afshar and his involvement with procuring building materials.
The Journal reported in July that Tesla’s board also inquired about Musk’s involvement in the project, and the amount of time any employees spent on it.
If a public company were to use company funds for an executive’s personal expenses, it could lead to an IRS investigation and shareholder lawsuits.
The Journal reported on Wednesday that it’s unclear whether the building project is still in the works or whether the glass order was delivered.
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