Former UTA board member Terry Diehl indicted on charges linked to development deal

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SALT LAKE CITY -- A federal grand jury has indicted a former member of Utah Transit Authority's board, the day after the agency struck a deal to avoid prosecution.

Developer Terry Diehl was indicted Wednesday on 12 counts of filing false declarations and concealing assets. In a statement, U.S. Attorney for Utah John Huber said Diehl was accused of not disclosing details about a Frontrunner development deal in a bankruptcy court filing.

"The defendant is a former UTA board member. Among other conduct, the indictment alleges that the defendant received more than $1 million in gross income related to a UTA Front Runner real estate development. It further alleges that he knowingly and fraudulently misrepresented that income to the bankruptcy court,” Huber said.

Diehl is also accused of setting up a company called Skyline Ventures Associates, Inc., that was owned by his daughters but controlled by him. Federal prosecutors allege Diehl used it to conduct daily business. He is also accused of under-reporting income to the U.S. Bankruptcy Court.

Diehl's attorney did not immediately respond to requests for comment from FOX 13 on Wednesday afternoon. Diehl resigned from UTA's board in 2011, after an audit for the Utah State Legislature the previous year questioned the agency about potential conflicts of interest in development deals around transit stations.

In a statement to FOX 13 Wednesday night, UTA said it had cut ties with Diehl.

"Mr. Diehl left the UTA board years ago. In August 2015, UTA sent Mr. Diehl a letter demanding that he cease and desist from any and all contact with UTA. We are not aware of anyone at UTA having contact with Mr. Diehl since that time," the agency said in its statement.

"UTA is cooperating with the U.S. Attorney’s Office. We trust the justice system to resolve this matter appropriately."

That letter was attached as an exhibit in a cooperation deal UTA struck with the U.S. Attorney's Office. In it, UTA's attorney accused Diehl of contacting board members, staff and executives "in an attempt to influence certain UTA projects."

"As you are aware, pending legal matters call into question the propriety of your ongoing contact with UTA," agency lawyer Jayme Blakesley wrote, asking him to end contact with them.

Diehl's indictment came the day after federal prosecutors announced the cooperation deal with UTA. The non-prosecution agreement calls for the transit agency to cooperate with an ongoing criminal investigation, including offering information, helping secure testimony and hiring an independent monitor to ensure reforms are made.

At a news conference Tuesday, the U.S. Attorney's Office for Utah disclosed the existence of the ongoing federal probe, which focused on use of federal grant money.

U.S. Attorney for Utah John Huber speaks at a news conference announcing a cooperation agreement with UTA in an ongoing criminal investigation. (Image by Pete DeLuca III, FOX 13 News)

The federal investigation came out of a blistering audit in 2014 that slammed UTA over excessive salaries and bonuses, spending and questionable development deals. At a news conference Tuesday, newly appointed UTA CEO Jerry Benson insisted changes had been made and reforms were being implemented.

Diehl was not being arrested, authorities told FOX 13, but will instead be issued a summons to appear in federal court. If convicted, he faces five years in prison on each count and a $250,000 fine.

UPDATE: Diehl's lawyer issued a statement Thursday, saying:

Read the indictment here:

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