Missing: Madeleine McCann disappeared on May 3, 2007, in Praia da Luz, Portugal
Thousands of members of the public donated money to Gerry and Kate McCann's fund after their three-year-old daughter went missing during a holiday in Portugal in May 2007.
Now it has emerged that a sizeable portion of that money was paid to self-proclaimed security consultant Kevin Halligen, 50, a Briton who boasted that secret service contacts in Washington DC could provide satellite images of Portugal from the night Madeleine disappeared.
In fact, it is claimed, the only satellite picture he produced came from the publicly available Google Earth website - and late last year he disappeared from Washington after the U.S. Department of Justice issued a warrant for his arrest over an alleged £1million fraud.
The McCanns' MP, Stephen Dorrell, said: 'This man appears to have seen a vulnerable family going through a terrible ordeal, and the only thing he was focused on was that there were people offering money to help find Madeleine.'
A source close to the McCanns said: 'Kate and Gerry are doctors from Leicestershire, they aren't experts in private investigations.
'Their millionaire benefactor Brian Kennedy helped check this guy out, and he seemed kosher.
'But some of us thought the way Halligen changed mobile phone every day out of an obsession with secrecy smacked of Walter Mitty.
'Now he's looking like some sort of fraudster. It's obviously massively upsetting.
'The bottom line is that there's still a little girl missing, the parents are desperate and they want to use the donated money to employ the best available people to find her.'
'Fleeced': £300,000 of public money donated to Kate and Gerry McCann's fund to find Madeleine was paid to security consultant Kevin Halligen
Halligen came into contact with the McCanns 18 months ago, a year after their daughter disappeared from their holiday villa in Praia da Luz on the Algarve.
He claimed his firm, Oakley International, would be able to provide an undercover surveillance and intelligence gathering service in Portugal, and also provide satellite images of the area involved and records of telephone calls made on the night Madeleine disappeared.
Halligen subcontracted much of the work to other firms, and some of it was carried out to the McCanns' satisfaction.
But later it emerged that he had not been paying the sub-contractors - and was instead allegedly lavishing the cash on first-class flights, luxury hotels and chauffeur-driven cars for himself.
He was never paid the final £200,000 he had requested. The McCanns severed contact with him a year ago.
But Halligen's name has now emerged because of his apparent flight from claims that he defrauded Dutch firm Trafigura of £1million after it hired him to help secure the release of two executives arrested in the Ivory Coast.
When suspicions arose that he had spent the money from Trafigura on a luxury house, official inquiries began.
A host of allegations were made against him in The Sunday Times yesterday. He worked in electronics but suggested to colleagues, that he had worked for MI5, MI6, GCHQ and the CIA.
He allegedly boasted that he had extensive 'operational experience in Northern Ireland and the Middle East' and had close links with secret services and special forces.
Last night, the McCanns' official spokesman, Clarence Mitchell, said money was only ever paid to Oakley International for work completed.
The first year of accounts for the Find Madeleine fund revealed donations had totalled £1.8million, and that total outgoings were £815,000.
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