Feds narrow criminal case against ex-UTA board member Diehl — again

New indictment drops tax-evasion charge.

Francisco Kjolseth | Tribune file photo Former Utah Transit Authority board member Terry Diehl, a developer, is being investigated by the FBI over alleged tax fraud.

Federal prosecutors have amended the criminal case brought against former Utah Transit Authority board member Terry Diehl for a second time — dropping a count of criminal tax evasion.

Once charged with 14 felonies, the politically connected developer is set to face two when his trial begins in November.

A grand jury handed up the new indictment Wednesday afternoon. The remaining charges include one count of making a false declaration and filing a false tax return.

The original charges — filed in April — stem from allegations that Diehl did not disclose $1 million in assets as part of a 2012 bankruptcy proceeding involving his development company Wasatch Pacific Inc.

Prosecutors added three tax-related charges a few weeks ago, saying Diehl had transferred the funds to a separate company owned by his daughters. By doing so, prosecutors contend, Diehl misrepresented his income, causing a false tax return to be filed so Diehl could avoid a tax bill.

Diehl has pleaded not guilty to all the charges.

He’s scheduled to appear in Salt Lake City’s U.S. District Court on Thursday to respond to the new indictment.

Court papers say the $1 million came from the 2011 sale of land in Draper that was part of controversial UTA development near the site of a planned FrontRunner train station.

Diehl and a business parter had purchased the land with a $10 million loan from UTA in 2010, when Diehl was a member of the board.

The transaction was the subject of two legislative audits and two criminal investigations, first by the Utah attorney general’s office and later by the Utah FBI office.

The latter probe is ongoing.

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