SALT LAKE CITY – Terry Charles Diehl, 61, of Salt Lake City, is facing a 12-count federal indictment alleging a calculated scheme to defraud creditors during his 2012 bankruptcy reorganization. The former Utah Transit Authority (UTA) board member is accused of hiding over $1 million in income and manipulating a shell company to shield assets from the court.
U.S. Attorney for Utah John W. Huber and FBI Special Agent-in-Charge Eric K. Barnhart announced the indictment Wednesday, signaling a crackdown on those attempting to exploit the bankruptcy system. “We seek to protect the integrity of the bankruptcy court from those who would exploit its protections because of selfish motivation,” Huber stated. The indictment specifically points to funds earned through a UTA Front Runner real estate development in Draper, Utah, allegedly concealed from bankruptcy filings.
Prosecutors allege that months before filing for Chapter 11 on March 30, 2012, Diehl established Skyline Ventures Associates, Inc. (SVA), ostensibly owned by his two daughters, but fully controlled and managed by him. This entity served as a conduit for Diehl’s financial dealings, with a dedicated business bank account. While his daughters and an office manager were listed as authorized signatories, the indictment claims Diehl dictated all financial activity, directing both deposits and withdrawals.
The core of the fraud centers on Diehl’s failure to disclose SVA and its associated funds in his bankruptcy filings. According to the indictment, he deliberately omitted SVA from his Statement of Financial Affairs, a sworn declaration requiring complete transparency. He also allegedly failed to report the $1 million+ in income from the UTA Front Runner project. Furthermore, prosecutors claim Diehl consistently underreported cash receipts on 11 Monthly Operating Reports filed between April 2012 and May 2013, when his reorganization plan was confirmed.
Each directive to move funds into the SVA account, much of which went unreported, is described as a “knowing and fraudulent act” intended to conceal assets from his bankruptcy estate. The indictment lays out five counts of false declarations and seven counts of concealment of assets. If convicted on all counts, Diehl faces a potential sentence of up to five years in prison and a $250,000 fine per count. A summons will be issued for Diehl to appear in federal court.
It’s crucial to remember that an indictment is not a finding of guilt. Diehl is presumed innocent until proven guilty beyond a reasonable doubt in a court of law. The case is being prosecuted by federal prosecutors with assistance from special agents of the FBI and the U.S. Department of Transportation Office of Inspector General, signaling a coordinated effort to unravel the alleged scheme and hold Diehl accountable.
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Key Facts
- State: Utah
- Agency: DOJ USAO
- Category: White Collar Crime
- Source: Official Source ↗
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