CHELSEA — A road contractor under county and federal graft investigations had town-authorized work on Tasker Road halted by the state Wednesday for failing to hold proper permits.

Marshall Swan — owner of Marshall Swan Construction and the husband of embattled Selectman Carole Swan — was warned for violating Dig Safe laws.

The town recently hired Marshall Swan to grade eight dirt roads for $2,900, said Town Manager Angela Gordon, whose official duties include those as town road commissioner.

The Dig Safe System is a communications network based in Massachusetts that contractors, property owners and others are supposed to contact before digging. Maine is one of the five states in the system.

State law also requires anyone who digs to notify utility companies before starting a job.

Although extremely rare, the Maine Public Utilities Commission could levy fines against Swan of $500 to $5,000 if he continues working on Tasker Road without a permit.

Dennis Hayden, of the PUC’s underground damage prevention program, said he stopped Swan on Tasker Road to see if he had the proper permits Wednesday morning.

“He did not have correct permitting,” Hayden said Wednesday. “It’s still under investigation at this time. It appears that he is in violation. We have no authority to stop him, but advised that he is in violation and, if he continues to work, he could be cited at another time.”

Digging can be dangerous and costly without knowing where underground utilities are located, Hayden said.

Hayden, who said he has “had dealings” with Swan in the past, said Swan could be penalized or the PUC could go to court to stop the work.

“If he continues to be in violation, there could be civil penalties and the potential for monetary penalties, but we also use training as a method of offsetting the violation.”

Swan has been known to conduct road work without proper permits.

The state sanctioned Chelsea in 2009 because Swan drained “a wetland of special significance” and installed a culvert in a “significant waterfowl and wading bird habitat” on Windsor Road without the required state permits in December 2009.

Gordon said the town is still waiting for the state to issue an after-the-fact permit allowing the town to restore those wetlands. The cost has yet to be determined.

That $66,600 project boosted scrutiny of the relationship between Swan and his wife — a selectman who at the time was acting as de facto road commissioner — because it was awarded as an “emergency,” allowing him to win the job without bidding. Windsor Road residents questioned the emergency claim.

In an August interview, Carole Swan — whose 19-year tenure as selectman ends this month — said Chelsea’s town managers had had no experience writing bid specifications, so it was easier to give jobs to Marshall Swan Construction and keep the amounts under $10,000.

She faces charges of aggravated forgery, attempted theft and two counts of improper compensation in an unrelated matter that involves allegations she shook down a plow contractor for as much as $20,000 in 2010 and early this year.

Her attorney has indicated she will plead not guilty to those charges, saying she accepted the kickbacks as part of a town investigation she was conducting. Her next court appearance is July 26, though her case is also seen likely headed for a grand jury.

Marshall Swan, a member of the town Planning Board, is the subject of criminal probes at the county and federal levels alleging “intent to circumvent the town’s purchasing ordinance,” Kennebec County Sheriff Randall Liberty has said. He has not been charged, and — along with his wife — retains access to the Town Office for official business.