Friday, June 1st, 2012But Dr Kleinbloesem faces a new scandal, this time financial. He is accused of using patients' funds and investors' money to finance his lifestyle. Lawyers acting for investors are accusing Dr Kleinbloesem of "misappropriating monies from XCell on a grand scale". It is also alleged, in proceedings begun in a German court, that Dr Kleinbloesem was given £200,000 to set up a charity to help poorer patients receive treatment free at XCell but that the foundation was never actually established. Dr Kleinbloesem vehemently denies the claims. When the XCell-Center closed last year, auditors discovered that it had no almost no money left in its accounts. It is now in the middle of bankruptcy proceedings. Patients who had handed over deposits for stem cell therapies that never took place are unlikely to get their money back, and investors who put in about £10 million believing that Dr Kleinbloesem was presiding over a pioneering treatment have also lost out. The Sunday Telegraph has obtained bank details which show a payment of $500,000 (£320,000) from XCell's bank account to a Turkish man for what insiders claim is the purchase of a yacht. Photographs of the six-berth boat, moored in the Mediterranean, appear to show Dr Kleinbloesem relaxing on board. Similar yachts are typically available for hire at about £20,000 a week. Dr Daniel Kautenburger-Behr, a lawyer acting for one of the investors, said in a statement to The Sunday Telegraph: "Our client and the other investors dissociate themselves from the methods of treatment and the tragic course of events at XCell-Center. "The state of affairs at XCell was not known to them because, as director, Mr Kleinbloesem successfully concealed these circumstances. In our opinion he also did this in order to cover up embezzlement at the firm's expense. To our knowledge, Mr Kleinbloesem has misappropriated monies from XCell on a grand scale. To our knowledge, Mr Kleinbloesem purchased, among other things, a yacht in Turkey using nearly 400,000 of the firm's funds." The investors are also undertaking legal action over claims that £200,000 they put into a foundation to give free treatment to poorer patients has also gone missing. Dr Kleinbloesem, who lives outside Dsseldorf in a villa worth several million pounds, has responded angrily to the series of allegations made against him. In an email to The Sunday Telegraph, the Dutch-born scientist denied any wrongdoing and blamed others for XCell's closure. He wrote: "For each financial transaction of the company to me or others there was a contractual basis. So under no circumstances money was embezzled. "I did not spend any money from XCell for private means, including a yacht. In addition, all yearly accounts were presented in a transparent way, with individual listings of transactions, and were consequently approved by all shareholders." He said the failure to return patients' deposits after XCell went into receivership was both "unforgivable and immoral" but insisted that he could not be blamed, since by that stage he had been removed from his post. He added: "As a consequence of these false claims and accusations my lawyer has filed criminal charges against all those people announcing those false claims and additional corresponding civil claims were submitted." Dr Kautenburger-Behr said shareholders had not seen or signed off individual transactions and said investors had not received any correspondence detailing criminal charges filed by Dr Kleinbloesem. Investors also insist that Dr Kleinbloesem continued to take deposits from patients after it became evident there was no longer any money in the company to carry out procedures. The collapse of XCell followed an undercover investigation by this newspaper in October 2010 during which one of the clinic's doctors told a reporter, who suffers from multiple sclerosis and uses a wheelchair, that he could walk again if he paid about £20,000 for treatment. In fact, there is no evidence that XCell's methods actually work, not least because it seemingly never submitted any of its results for independent audit. Since opening in 2006, XCell, which operated from state-of-the-art facilities in a hospital overlooking the Rhine, treated more than 3,000 patients, charging them between £10,000 and £30,000. When The Sunday Telegraph visited Dr Kleinbloesem's home, neither he nor his wife, who also worked at the clinic, would answer the door. Two cars sat in the drive: a £60,000 Porsche Cayenne with Swiss number plates, which is driven by Dr Kleinbloesem, and a £50,000 BMW. Dr Kleinbloesem faces a series of legal actions while police investigate the death of a two-year-old boy who travelled to XCell from Italy for treatment. The boy died from a haemorrhage having gone for treatment in which stem cells were extracted from his bone marrow, processed at an outside laboratory and injected into his brain. By reopening his business in Beirut, Dr Kleinbloesem circumvented the European laws that effectively forced XCell's closure. His new operation, Cells4Health, was using a company based on the outskirts of London to process the stem cells before returning them to Lebanon for injection into patients. It is understood the company has pulled out of the deal. Cells4Health, like XCell before it, offers a possible cure to patients suffering illnesses such as heart disease, cerebral palsy, Parkinson's and autism. In an email to XCell's former patients – which was also sent to an American woman who died from a brain infection following treatment in Dsseldorf – Dr Kleinbloesem blamed the centre's closure on the medical establishment's "resistance" to stem cell treatments for "economic reasons". He added: "Their lobby is very strong, making it almost impossible to provide stem cell therapy in US and Europe. This, however, has not withheld us to look for alternatives around the globe. Today we are proud to announce that we have established a stem cell treatment centre in Lebanon."
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