Kate Middleton's uncle was warned about his hedonistic lifestyle over fears he would embarrass the British royal family.
Gary Goldsmith, who was recently captured on camera boasting about supplying illegal drugs and prostitutes, was urged to tone down his partying ways more than a year ago by security services who were concerned his behaviour could affect Kate's relationship with Britain's Prince William.
They have been on to me and I've got to keep a low-profile and be a good boy.
I am going to stop all the drugs and clean up my act.
Gary - whose Â£5 million villa on the party island of Ibiza, Spain, was visited by Kate and William in 2006 - reportedly told pals: "They have been on to me and I've got to keep a low-profile and be a good boy.
"I am going to stop all the drugs and clean up my act."
William has reportedly been forced to cut ties with Gary - the brother of Kate's mother Carole - after his illicit behaviour was exposed in a British newspaper over the weekend.
Gary allegedly offered undercover reporters cocaine and Â£600-a-night prostitutes. The 44-year-old also made embarrassing claims about William and said the future king would soon announce his engagement to Kate.
A source revealed to Britain's Daily Mail newspaper: "Gary is said to be beside himself - practically suicidal - over the revelations but in truth he was always an accident waiting to happen."
One family member said: "Seeing him all over the newspapers has come as a hell of a shock. He is really quite a nice chap but he really has fallen by the wayside.
"He's made a lot of money in business and when you meet him you would say, â€˜This man's no fool' but what he has done now is a severe embarrassment to friends and family. Many of them - including Kate's parents - will be distancing themselves from him now."
Spanish police are reportedly investigating Gary's claims, but it is unlikely any action will be taken against him.