Exclusive: Inside the Affair That Ended Kelly Osbourne's Engagement

When Kelly Osbrourne and fiance Luke Worrall called it quits in July, rumors swirled that Worrall's infidelity led to the nasty split. Earlier this month, it was revealed that the other woman is model Elle Schneider (who was born with the name Reynaldo Gonzalez). Another shocking revelation: Schneider, 21, was born a man and is now awaiting gender reassignment surgery.

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Schneider, who spoke exclusively to UsMagazine.com on Jan. 24, tells Us that she was approached by model Worrall "a year and a few months ago" at an NYC club. "I didn't know that he was engaged" to Osbourne, 26, she points out.

After exchanging numbers, the duo spent the night together at Schneider's room at the Four Seasons Hotel, and she says there was no doubt that Worrall knew about that she was a transgendered woman: "He knew instantaneously when he met me that night...He was definitely not turned off by it at any point. In fact, he was turned on. He made it very obvious."

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Following their rendez vous at the Four Seasons, Worrrall and Schneider lost touch. "Luke is only the second guy I've ever slept with," she adds. "And I had no idea what was going on [with Kelly]."

But in November 2010, Worrall reached out to her via Twitter, Schneider says, adding: "He told me that everything with Kelly was over." After regularly skyping each other, the two reunited for two days in London last December.

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Little did she know, however, that Worrall was simultaneously trying to reconcile with Osbourne. Although his engagement to Osbourne was still off, Schneider says, "they were still trying to work things out". At least until Osbourne discovered his online messages with Schneider. (Osbourne famously went on a Twitter against her ex around that time, without specifically explaining the situation.)

"[He] immediately he told her that I was just a friend," Schneider says. "That he had nothing with me. But I guess she saw right through it. It was quite obvious through the messages that he was sending me that that was a lie."

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Osbourne then reached out to Schneider via Facebook. "She let me know that he had broken her heart once again because he basically cheated on her with me. They were not officially broken up; she just couldn't believe he had done this to her again."

Osbourne and Schneider have since developed an unlikely friendship and have chatted "for hours," Schneider tells Us. "I gave her an idea of who I was. I was never mean, I was never doubtful so she had to say I always believed in her. And I was always there to listen when she would cry or call me. And she told me 'you know I understand what he sees in you and I respect that'. I [have] no ill intent towards her. She and I are still good friends."

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As for Worrall? "I basically cut all contact with him [last] weekend," she says, explaining that she learned he was sexually involved with numerous other people. "There's no point in having him there."