Embattled ex-Utah Transit Authority board member Terry Diehl is expected to appear in federal court on Thursday to stand trial on criminal charges that were amended Wednesday for a third time.
Handed up by a grand jury, the 11th hour indictment leaves the politically connected developer charged with only one criminal count — making a false declaration. Originally, Diehl faced 14 charges and that number has changed three times over the past 29 days.
Jury selection is set to begin at 8:30 a.m. Thursday, with opening statements scheduled for Monday.
The revelation about the government’s plans for a new indictment was tucked into U.S. District Court papers filed by the defense late Tuesday that blasted the government for using “bait and switch” tactics against Diehl by charging him with crimes they knew the evidence wouldn’t prove and then dropping the counts.
“Their charging conduct is not only improper,” Diehl’s attorney Loren Washburn wrote, “but has improperly manipulated the playing field so many times in the run up to the long and firmly scheduled trial that Mr. Diehl is seriously prejudiced by having been misled about the charges.”
The U.S. Attorney’s Office declined to comment on the case through a spokeswoman Wednesday afternoon. In the past the government has said amendments to the charges were tied to pretrial rulings by U.S. District Judge Clark Waddoups.
Among the examples Washburn offered as proof of misconduct is a copy of a tax return that the government used to allege that Diehl had filed a false return in 2011.
The signature on the document is neat and precise, but it isn’t Diehl’s — a fact easily proven if the return is compared to other documents inked with Diehl’s large, loopy and illegible script, court papers say.
“The unavoidable conclusion is that the government did not exercise even the slightest prosecutorial diligence to carefully review the signature on the tax return that was the predicate for filing the false return charge,” Washburn contends.
Diehl was originally charged with 12 felonies related to allegations that he lied about, and then hid $1 million in assets in a 2012 bankruptcy.
That number went up to 14 early last month when prosecutors added several tax-related charges. The case was amended again on Oct. 18 and 25 — to reduce the number of charges first to 11 and then to two.
With each change, Diehl has entered pleas of not guilty.
The new indictment charges Diehl with making a false declaration for allegedly failing to disclose the existence of a company called Skyline Ventures Associates on an initial statement of financial affairs in his bankruptcy proceeding.
The company was set up by Diehl in late 2011 with his daughters listed as the registered owners, even though their father managed and controlled the company, prosecutors say. The $1 million in question was money Diehl allegedly directed into SVA bank accounts, even though it was earned through work he did under his bankrupt Wastach Pacific entity, according to prosecutors.
If convicted of the charge, Diehl could spend five years in federal prison. Court papers also say the government will seek a forefeiture of Diehl's assets.
Prosecutors sought to delay the trial after securing the new indictment Wednesday, saying they needed time to respond to allegations of misconduct by Diehl. Waddoups denied the request.
Diehl likely could have sought a dismissal given the timing of the new indictment, but instead court papers said he wanted the case to proceed, with restrictions placed on which witnesses government attorneys could call.
Waddoups granted part of that motion in a hurriedly held hearing after the release of the new indictment on Wednesday afternoon.
Charging documents have alleged the $1 million came from the 2011 sale of land in Draper. The property was part of a controversial transit oriented development near the site of a FrontRunner train station.
Diehl, then on the UTA board, had with a business partner purchased the land in 2010 with a $10 million loan from the agency he helped oversee.
The transaction 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 probe is reportedly ongoing.
