After two years of living under the scrutiny of government investigators and prosecutors, developer and ex-Utah Transit Authority board member Terry Diehl walked away from a federal courthouse Monday free of any criminal charges.

The politically connected Diehl had been set to stand trial on a single felony count of making a false statement, a charge that stemmed from allegations he lied on a financial statement in bankruptcy court.

Instead, federal prosecutors asked U.S. District Judge Clark Waddoups to dismiss the case, saying the judge’s rulings on some evidence had so gutted the case that they could not proceed.

“It’s a good day,” Diehl said as he left the courthouse Monday; his manner was, as it is typically with reporters, fairly stoic.

Diehl didn’t say more than his passing comment on the way out of court, but in a statement, his defense team said the outcome is a great relief to Diehl and his family.

“He looks forward to reclaiming his good name and moving forward with the next chapter of his life,” Diehl attorney Loren Washburn wrote.

And it seems he’ll be able to do that: The case against Diehl can’t be refiled because a jury of 13 had already been seated in the trial, Assistant U.S. Attorney David Backman said.

Asked if the dismissal should be viewed as an acquittal, however, Backman offered a firm “no.”

“It’s a situation where we were not able to present the best evidence that we have to a jury,” he said. “Of course, we have great respect for the court, we’re just disappointed by the court’s ruling.”

Waddoups’ decisions — one from Friday of last week — were tied to how much evidence related to an April 13, 2012, financial statement filed in Diehl’s $41.7 million bankruptcy could be heard by the jury.

Federal prosecutors contended that pre- and post-April 13 records showed Diehl’s intent to defraud his creditors by failing to disclose his ties to Skyline Ventures Associates, a company said to have been owned by Diehl’s daughters.

Prosecutors said, however, that it was Diehl who controlled the business and its bank accounts. Not all of the money that flowed to SVA was disclosed by Diehl and in that way, he defrauded his creditors, the government said.

“By failing to disclose SVA, Mr. Diehl could game the bankruptcy system,” Backman said. “And he could continue to live large without the bankruptcy trustee or the creditors knowing about it.”

Diehl has a reputation for living a lavish lifestyle that includes multimillion-dollar homes, fancy cars, a country club membership, a big credit line with Las Vegas casinos and other luxuries.

Diehl’s attorneys dispute the notion SVA had been hidden from either bankruptcy court or any creditors. Beginning in May 2012, SVA is disclosed on Diehl’s financial reports filed with the court that show money he was paid for consulting and other work on SVA’s behalf.

“He never failed to talk about SVA. He disclosed that it was his only employer,” Diehl attorney Washburn said during an October court hearing. “It was the vehicle through which he was going to earn money to pay back the debtors from the bankruptcy.”

Waddoups’ Friday ruling barring pre- and post-April 13 evidence from opening statements to the jury “gutted three-fourths” of their case, prosecutors said.

“How is the United States supposed to put on its case and make no mention of the most significant evidence?” Assistant U.S. Attorney Mark Hirata asked Waddoups.

Waddoups said Hirata had mischaracterized the rulings, later adding: “If you’re telling me you can’t make a case, then the government ought to evaluate whether you should have ever filed an indictment.”

Diehl, a well-known developer with friends in high places — including House Speaker Greg Hughes, R-Draper — once stood charged with 14 felony counts that stemmed from allegations that he lied about or hid assets as part of a 2012 bankruptcy.

Prosecutors had whittled the case down three times since early October, dropping counts of concealment and tax evasion.

Those decisions were driven by other court rulings and the recognition of missteps by prosecutors, including miscalculating the amount of taxes Diehl had failed to pay, Backman said.

“When we make mistakes in a criminal case, we try to do the right thing and dismiss those charges as soon as possible,” he said. “That’s what we did.”

Diehl had entered pleas of not guilty to each of the indictments handed up by the grand jury.

Had he been convicted by a jury on the final charge, he could have faced a punishment of five years in federal prison and $250,000 in fines.

Early iterations of Diehl’s indictment were tied to his time on the UTA board and controversial land transactions in Draper near a UTA FrontRunner train site.

The first was in 2010, when Diehl — then on the UTA board — and a business partner purchased the property with a $10 million loan from the public agency he helped oversee.

The loan was 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.

The latter investigation is reportedly ongoing and UTA and the government have inked a nonprosecution agreement in exchange for the transit agency’s cooperation. Backman declined comment on the investigation.

UTA’s general counsel, Jayme Blakesley, was among those who packed the courtroom Monday expecting to hear opening statements in the trial, which had stirred up old allegations of ethical breaches and other missteps by some connected with the agency in the past.

After the dismissal, UTA issued a statement touting the reforms it has adopted since 2014 to strengthen internal checks and balances, improve transparency and toughen ethical standards.

It also doubled down on its severed relationship with Diehl, who resigned from the board in 2011 amid conflict-of-interest allegations and was later told in a 2015 letter from the agency to end any ongoing interactions with its members.

“Terry Diehl is no longer affiliated with UTA in any way,” UTA’s statement reads. “UTA is a much different organization today than it was years ago.”