Manhattan federal prosecutors are investigating Tesla following reports that CEO Elon Musk allegedly sought to allocate company funds to build a spacious glass house in Austin, Texas.

According to The Wall Street Journal (WSJ), the U.S. Attorney’s Office for the Southern District of New York has requested information about personal benefits paid to Musk, how much Tesla spent and what the money was for.

Manhattan federal prosecutors are investigating Tesla following reports that CEO Elon Musk allegedly sought to allocate company funds to build a spacious glass house in Austin, Texas. Photo courtesy of Trevor Cokley/Wikimedia Commons.

The outlet reports that the Securities and Exchange Commission has also opened a civil investigation into the matter. Both investigations remain in the early stages.

The news follows a WSJ report in July that Tesla board members had investigated whether company funds were being used for a secret project, now known as Project 42. The investigation also drew in a Tesla executive and several employees.

Bloomberg reported in 2022 that Omead Afshar, an executive at Tesla’s Austin factory at the time, had been under investigation by Tesla after he requested a purchase of large-sized, specialized glass worth millions of dollars. Afshar told employees the glass was for a special project.

However, Tesla’s system flagged the order as items that could possibly be a misuse of company resources. The WSJ reports that unnamed sources with knowledge of the situation claim that some employees were concerned about the reason for the large amounts of specialized glass typically used on building facades.

Tesla’s board originally focused on Afshar but pivoted to investigate Musk’s involvement. Bloomberg reports that several employees were terminated, and Afshar is now working at SpaceX, another company owned and led by Musk.

It is unclear if the glass house is still planned or whether the glass order was delivered. The WSJ obtained documents showing the project was for a “dramatic glass-walled building” close to Tesla’s headquarters in Austin.

The plans included waterfront views, a hexagonal shape and views of Tesla’s headquarters. Concept plans featured differing designs but included residential elements such as bedrooms.

Tesla moved its headquarters to Austin from Palo Alto, Calif., in 2021.

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