Dismissal of Neb. securities fraud lawsuit upheld

OMAHA, Neb. -- The Nebraska Supreme Court on Friday upheld the dismissal of a lawsuit brought by an Omaha man convicted of investment fraud against his former business attorney.

Bryan Behrens had sought to sue his former attorney Christian Blunk for more than $8 million owed to investors. In court filings, Behrens said Blunk gave him bad advice and was to blame for the securities fraud.

But a Douglas County District Court dismissed the lawsuit, saying the 2-year statute of limitations had run out, among other things. On Friday, the Nebraska Supreme Court agreed and upheld the dismissal.

It was the second time the state's high court had ruled on the lawsuit. In 2010, the Nebraska Supreme Court reinstated the lawsuit after a lower court dismissed it after Behrens had sought Fifth Amendment protection from self-incrimination and wanted to postpone the lawsuit because of his then-ongoing criminal case.

At the time, the high court said the judge should have delayed the case until after Behrens' criminal trial.

In Friday's opinion, the Nebraska Supreme Court noted that Behrens argued he could not have discovered the malpractice until December 2007, when Behrens sought the counsel of another attorney after learning that the federal Securities and Exchange Commission had opened an investigation into his business. But the state's high court agreed with the lower court that Behrens should have discovered the alleged malpractice years earlier, in October 2001, when both Behrens and Blunk were notified Behrens was being investigated by the Nebraska Department of Banking.

"The statute of limitations was a close question," said Behren's appeal attorney, David Domina of Omaha. "It's a difficult area of the law, and the court obviously analyzed it with care."

Attorneys for Blunk did not immediately return messages left Friday seeking comment on the opinion.

Behrens was sentenced last year to five years in federal prison for securities fraud.

Federal prosecutors have said Behrens, who founded the Omaha-based 21st Century Financial Group, collected more than $8 million from about 25 investors between 2002 and 2007. Behrens defrauded mostly elderly investors by soliciting millions under false pretenses, failed to invest those funds as promised and misappropriated and converted investors' funds to his other business entities, according to the U.S. attorney's office.

Prosecutors said much of that money went to Behrens' lavish lifestyle that included two homes, several luxury cars, jewelry and a Husker bus he used to take friends and family to tailgating parties at Nebraska football games.