Terry Diehl enters not guilty plea — for the third time — in narrowed federal criminal case as the trial looms

Francisco Kjolseth | Tribune file photo Former Utah Transit Authority board member Terry Diehl, a developer, is the subject of a state investigation into conflcit-of-interest issues raised in a legislative audit.

It was déjà vu all over again Thursday for embattled former Utah Transit Authority board member Terry Diehl.

Before a federal magistrate, Diehl entered a plea of not guilty to criminal charges — the third time he’s done so since a grand jury first indicted him earlier this year.

The politically-connected developer now faces just two of the 14 felonies federal prosecutors had once stacked against him in connection with allegations that he failed to disclose $1 million in assets as part of a 2012 bankruptcy proceeding.

The remaining two charges include one each of making a false declaration and filing a false tax return.

A jury trial is scheduled to begin in Salt Lake City’s U.S. District Court on Nov. 2.

If convicted, Diehl faces a prison term of five years and a fine of $250,000 on the declaration charge; the penalty for filing a false tax is a term of up to three years and a $100,000 fine, plus the cost of prosecution.

This is the second time in a week that the U.S. Attorney’s Office has narrowed the scope of its case against Diehl by dropping charges. First 11 counts were dropped through a new indictment on Oct. 18, with one additional count dropped this week.

Prosecutors have not offered specifics about their decisions, but last week, U.S. Attorney John Huber said the case had been “refined” following pre-trial court rulings from Judge Clark Waddoups.

Diehl’s attorney, Loren Washburn, has yet to comment Thursday morning.

All of the counts brought against Diehl stem from allegations that he failed to disclose $1 million in assets as part of a 2012 bankruptcy proceeding involving his development company Wasatch Pacific.

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

The transaction — with the 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 parter Jeff Vitek so they could purchase the property.

The transaction 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.

The latter probe is ongoing and federal prosecutors have inked an immunity deal with UTA in exchange for the agency’s cooperation.