Matt,
I worked for an electrical company years ago, I know of one time where the company didn't pull a permit on an "undercover reno" for an apt in a building in one of NJ's big cities. The brother of the evicted tenant called the city about the work going on in there. I know my boss was called down town to meet with the Building Dept. He had to put on a dress shirt, so I guess he was worried :) Anyway, he said that they gave him a very stern warning. It helped that the building was owned by two city detectives...Those detectives ended up screwing him & a lot of others out of a lot of money as I found out years later.
I would hope they are just looking to rattle you, maybe "tax" you a few hundred and not the up to $15K threat.
Most times when dealing with a new inspector or city official, I've found you humble yourself, grovel, stroke their ego and they treat you well, even become friendly & helpful. If you try to put yourself at their level or higher, they'll be hell on wheels.
Hope everything works out for you.