A federal grand jury has handed up a new indictment of former Utah Transit Authority board member Terry Diehl that slashes the number of criminal charges the developer faces from 14 felonies to three.

The new indictment strips out 11 counts alleging false declarations and concealment of assets from the bankruptcy fraud case filed in April and leaves Diehl facing three tax-related charges — counts of false declaration, tax evasion and filing a false return.

In a statement, U.S. Attorney for Utah John Huber said the indictment was revised due to rulings made by a federal judge at a pretrial hearing last Thursday. The decision by Judge Clark Waddoups narrowed the scope of the government’s case, by limiting the evidence a jury could hear to that which showed Diehl personally benefited from the alleged hiding of funds.

Prosecutors had notified Diehl’s attorneys of their plans to seek a revised indictment in an email Monday.



Diehl has pleaded not guilty to the charges and a 10-day trial is set to begin Nov. 1. Each charge carries a penalty of either three or five years in prison and $100,000 in fines, plus the cost of prosecution.

“Today’s news that the government has abandoned 11 of the 14 charges is certainly a step in the right direction for Terry Diehl,” the developer’s Colorado attorney Steve Peterson told The Salt Lake Tribune in a phone call. “He looks forward to clearing his name permanently on the remaining three charges at trial.“

All of the 14 counts Diehl originally faced are related to a $1 million payday Diehl got from the sale of land near 128000 South in Draper that is adjacent to UTA’s FrontRunner station.

The original indictment charged Diehl with 12 counts of lying about or concealing the $1 million as part of a 2012 bankruptcy proceeding

Prosecutors alleged the politically connected developer failed to report the payment and then hid it from the bankruptcy court by transferring the money to Skyline Ventures Associates (SVA) , a company owned by his two daughters, at least on paper.

Court papers say the company was formed in November 2011, four months before Diehl placed his own company, Wasatch Pacific, into Chapter 11 bankruptcy. Diehl managed and controlled all of SVA’s daily operations and financial affairs, prosecutors say, including directing a bookkeeper to move money in and out of company accounts.



Prosecutors contend the transfer of funds to Skyline Ventures accounts resulted in Diehl making false statements to an accountant and the filing of a false tax return so that he could avoid paying taxes of about $190,000.

The Draper land deal — property sold to eBay — was part of a controversial UTA “transit-oriented-development” plan that included a $10 million agency loan to Diehl and then-business partner Jeff Vitek so they could purchase the property.

The transaction, originally billed as upfront payment for construction of a parking garage, was also the subject of two scathing legislative audits and two criminal investigations; first by the Utah attorney general’s office and later by the Utah FBI office.