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Dr. Arnold Klein, who once treated Michael Jackson, blames money trouble on ex-employees.
Dr. Arnold Klein once treated Elizabeth Taylor, Michael Jackson and other A-listers while maintaining a lifestyle that matched his clients'. But a state medical board probe, financial problems and poor health have brought him low.
By Harriet Ryan, Los Angeles Times
January 1, 2012
For three decades, Dr. Arnold Klein drew the rich and vain to his Beverly Hills dermatology office. Trophy wives, industry bigwigs and A-list actresses glided through a reception area decorated with $1-million Warhols to have their laugh lines smoothed and their lips plumped.
Presidential administrations came and went. Cassette tapes gave way to iPods. But in the eyes of clients, "Arnie" remained the same: Charming, immaculately groomed and as puffed up about his mastery of the Botox needle as he was about the jet-set life he enjoyed with star patients-turned-pals like Elizabeth Taylor and Michael Jackson.
The perfect face Klein long presented to the world is now sagging. The man once touted as the "dermatologist to the stars" is bankrupt. Palatial homes where he entertained celebrity clients are in foreclosure. Mementos bestowed by grateful Hollywood friends are to be auctioned off to pay bills. And what may be Klein's most treasured asset, his reputation as a physician, has been called into question.
At the trial of another Jackson doctor this fall, Klein was portrayed by defense attorneys as an unscrupulous enabler who fueled the singer's addiction with enormous doses of Demerol that served no valid medical purpose. Dr. Conrad Murray was convicted, but after the verdict, Klein acknowledged publicly that he was under investigation by the state medical board.
"You hate to see somebody who was so good fall to such low levels," said Dr. David Rish, who shared a Roxbury Drive office with Klein for two decades and is now among his many creditors.
How he got there is a story with many wrinkles. Klein, 66, declined to comment. In bankruptcy filings, he has blamed his financial problems on two former employees who he alleges embezzled more than $8 million.
"The assets that Dr. Klein worked long and hard to build have been decimated," one of his attorneys wrote in a June suit against the employees that described the doctor's state as "a position of financial ruin and immediate peril."
The accused employees deny any wrongdoing and note that they have never been questioned by law enforcement or charged with a crime. An investigation of Klein's allegations by the U.S. Secret Service, which is responsible for maintaining the integrity of banks and other financial institutions, resulted in no charges, the agency said.
"Everything that happened on my watch was approved by him," said one of the accused, accountant Muhammad Khilji, who has countersued Klein for defamation.
He said Klein insisted on maintaining a lifestyle of chauffeured cars and shopping sprees even as his business fell off to the point that he could barely cover office rent. In the three years he worked for the doctor, Khilji said, Klein used more than $7 million on "personal luxury spending," including $800,000 for vacations and $550,000 for cars.
"Maybe it's time to look in the mirror, Dr. Klein," Khilji wrote last year in a resignation letter he provided to The Times.
The second employee, former office manager Jason Pfeiffer, is countersuing Klein for sexual harassment and other claims. In court papers worthy of an NC-17 rating, his lawyer wrote that Klein's medical career took a back seat to his sexual pursuits. The suit alleges Klein "required Pfeiffer to assist him in his search for sex partners, often for hours each day or night."
Klein has denied the allegations in both former employees' suits. The tawdry accusations and money struggles are a far cry from his long-held reputation as a medical pioneer and philanthropist. Klein helped develop a technique for using Botox to reduce wrinkles in the 1980s and later devised the procedure for lip augmentation. (A region of the upper lip — the Gloglau-Klein point — bears his name.) His practice became an entertainment industry favorite. With Taylor and others, he became an early advocate and fundraiser for AIDS research.
Cosmetic dermatology made him wealthy. He split his time among three homes — a $9-million Hancock Park mansion, a $12-million oceanfront estate in Laguna Beach, and a $1.6-million Palm Springs retreat — each painstakingly decorated with pieces from an art collection recently appraised at $7.2 million, according to court papers. He had a personal chef and a garage of luxury vehicles, including a Ferrari, a Rolls-Royce and a Bentley, public records show.
The wealth allowed Klein to give generously to a host of causes, volunteer as an unpaid professor at UCLA and support his disabled brother. He has said in court papers that he didn't realize he had any financial problems until August 2010, when his American Express card was declined. The two employees he blamed for his insolvency said they had been warning him for years that he was sinking into debt.
On some days Klein made only $500, down from $25,000 at his peak, Khilji said. "Show business people are notoriously fickle," said Dr. David Duffy, a Torrance dermatologist who said he had known and admired Klein for decades. He added, "The other part is just the economy has taken a dump."
Klein's lawyers have attributed some loss of income to unspecified medical problems. Klein uses a wheelchair and has described himself publicly as disabled, but he is closemouthed about his condition.
Then there was Jackson's 2009 death. The pop star had been a frequent visitor to Klein's office, and in the weeks after he died, paparazzi massed outside the dermatologist's building. The cameras clicked away as a coroner's official arrived to collect Jackson's medical records.
Klein initially issued a written statement through a lawyer saying federal health privacy regulations precluded him from commenting, but eight days later, he was dishing details of Jackson's medical care and sex life on national TV. Asked to debunk tabloid reports that he had fathered some of Jackson's children, Klein gave Diane Sawyer a cryptic answer that only added fuel: "Not to the best of my knowledge. That is all I can tell you."
The next month, he dispatched a lawyer to a court hearing packed with reporters to demand a role in the upbringing of Jackson's children. The judge immediately denied the request, which Jackson family lawyers labeled "quite bizarre."
Klein later agreed to a live interview with the gossip site TMZ.com and spent 96 minutes opining on Jackson's genitals, the addictive nature of crystal meth and other topics. He appeared on the tabloid program to bolster claims Pfeiffer made of "a passionate and sexual" relationship he had with Jackson. "When you see two people looking at each other you know what's happening," Klein said.
Jackson's family blasted the report, which Pfeiffer now concedes was "embellished," and Taylor castigated her longtime pal publicly. "I thought doctors, like priests took an oath of confidentiality. May God have mercy on his soul," Taylor, who died in March, wrote on Twitter.
It was a personal and professional blow. Klein hired a $20,000-a-month publicist last year to re-brand himself and win new patients, according to court filings. The image reboot never got off the ground. His financial situation became so dire that creditors threatened to seize his medical equipment, court records show. He filed for bankruptcy in January.
As creditors lined up with claims of $12 million, Klein found himself under attack in the criminal court where Murray was on trial for involuntary manslaughter. Defense lawyers made the dermatologist a boogeyman, eliciting testimony about how Jackson had often left Klein's office woozy and presenting medical records that showed Klein giving him outsize Demerol doses.
Murray's lawyers told jurors that Klein made the star dependent on Demerol and that an unwitting Murray was left to deal with the consequences, including Jackson's chronic insomnia. Klein's lawyer ridiculed the argument, the trial judge barred the defense from calling Klein to the stand, and jurors rejected the defense and convicted Murray.
Still, the allegations upset Klein. "I see stuff on the Internet and it hurts, because I don't like to be called a bad doctor," he told the Associated Press in October.
His professional conduct remains under scrutiny. Klein wrote on Facebook in November that a state medical board representative recently posed as a patient to serve him with a subpoena. He posted a letter from a former attorney reminding him that failure to appear before the board could result in the suspension of his medical license.
"I refuse to allow these people to sit in judgment of me or my ability to practice medicine," he said.
Creditors are clamoring for him to liquidate assets, such as his prestigious homes, but so far, Klein has opted for smaller measures: relocating to a cheaper office, reducing staff and increasing hours. And he has turned to his relationships with celebrities.
Actress Carrie Fisher, a longtime friend and patient, recently gave Klein $150,000 to pay a new bankruptcy lawyer, court records show. And the auction house Bonhams & Butterfields has set a January auction featuring mementos from famous acquaintances. They include a Princess Leia wig that Fisher wore to a party (estimated value: $200); the hat that covered Jackson's head when he left a hospital burn unit ($10,000) and an invitation to Taylor's eighth wedding ($350).
The sale is somewhat curious because it is expected to raise a modest amount — less than $700,000 — compared with Klein's debt and because it is hard to imagine anyone valuing the items as dearly as the man who saved them in the first place.
http://www.latimes.com/news/local/la-me-arnold-klein-20120101,0,7636614.story?page=2&track=rss
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