Duchess Fergie's Latest Scandal – Caught on Camera

UPDATED 05/24/2010 at 09:35 AM EDT Originally published 05/24/2010 at 07:45 AM EDT



Sarah Ferguson, the Duchess of York, has apologized and says she is "devastated" after being caught on video accepting money in exchange for a promise of business access to her ex-husband, Prince Andrew, who is a British trade representative.

"If you want to meet him in your business, look after me and he'll look after you … you'll get it back tenfold," Ferguson, 50, is seen saying while accepting a $40,000 cash down payment from an undercover News of the World reporter.

"That opens up everything you would ever wish for," she says. "And I can open any door you want. And I will for you."



In the video, Ferguson falsely claims Prince Andrew, 50, knew of the deal, and advised her to demand more than $700,000. "He knows that he's had to underwrite me up to now because I've got no money," she says on the video.

In fact, Andrew reportedly knew nothing of Ferguson's secret dealings, which will be a royal pain for him as he seeks to maintain his credibility as a British ambassador.

Ferguson has now apologized and says she is "devastated" by the sting operation, according to the Times of London.

"I very deeply regret the situation and the embarrassment caused," she said. "It is true that my financial situation is under stress. However, that is no excuse for a serious lapse in judgment, and I am very sorry that this has happened. I can confirm that the Duke of York was not aware or involved in any of the discussions that occurred."

Scotland Yard has been quoted as saying Ferguson did nothing illegal.


She Is 'Remorseful'

Friends tell PEOPLE that Ferguson is considering moving out of the home that the duke has given her for the past couple of years. "She is utterly remorseful and regretful, but for all that she knows she has to deal with it and she realizes it was her mistake and massive misjudgement, even if it came from a very desperate place," a family friend tells PEOPLE.

Andrew learned of the furor caused by his former partner while he was traveling back from Malaysia on his trade role. He has not said anything publicly yet. But Buckingham Palace has issued a statement on his behalf.

"The Duke of York categorically denies any knowledge of any meeting or conversation between the Duchess of York and the News of the World journalist," says the statement released to PEOPLE. "Since 2001 he has carried out his role of Special Representative with complete and absolute propriety and integrity."

Ferguson married Prince Andrew in 1986. They separated in 1992 and divorced in 1996. They have two daughters and remain close. Ferguson recently offered advice to Kate Middleton in the event that Prince William proposes to her. "Remember that you're marrying a beautiful man you are in love with and remember to make time for him," she said.

Additional reporting by SIMON PERRY

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