It was a searing story of modern America that earned rave reviews and a generous advance for its young author.

Love and Consequences told of a mixed-race girl raised on the violent streets of South Central Los Angeles, sexually assaulted at the age of 8, taken into care and recruited by a gang to deliver drugs.

Critics were fascinated by the gripping autobiography, withThe New York Times hailing it as a “humane and deeply affecting memoir”, and its writer, the little-known Margaret B. Jones seemingly assured of a glittering literary career. The only problem was that the story was not true.

The book’s publisher, part of the Penguin group, was withdrawing it from sale yesterday after being alerted to the hoax by the writer’s sister.

An editor who worked on the book for three years spoke of “a “huge personal and professional betrayal”. Love and Consequences tells the story of Bree, who is taken from her suburban parents when she arrives at school bleeding after a presumed sexual assault, and is brought up by a black foster mother known as “Big Mom”.

She joins the Bloods street gang and begins making drug deliveries. One of her four black foster brothers is shot dead by the rival Crips in front of their home. “I’d been watching for years as Terrell and Taye cooked powder cocaine and baking soda down on the stove to make crack while Momma was out working,” she writes.

Her words moved Michiko Kakutani, chief reviewer of The New York Times, to tell readers: “Ms Jones . . . captures both the brutal realities of a place where children learn to sleep on the floor to avoid the random bullets that might come smashing through the windows and walls at night, and the succour offered by family and friends,” Margaret B. Jones, it turns out, is a pseudonym for Margaret Seltzer, an all-white woman brought up by her biological family in the wealthy Sherman Oaks area of Los Angeles. She attended a private Episcopal school and never did live with a foster family, become a gang member or deliver drugs.

The 33-year-old author was exposed by her older sister after publication of a gushing profile in The New York Times. “It could have and should have been stopped before now,” Cyndi Hoffman sister, said. Criticising the publisher, Ms Hoffman said: “I don’t know how they do business, but I would think that protocol would have them doing fact-checking.”

The author now says that she based the book on characters and incidents taken from people she met while doing antigang outreach in Los Angeles.

The Penguin Riverhead Books imprint is withdrawing the title and cancelling the author’s book tour.

COVER STORIES

— Misha Defonseca admitted that her bestseller about surviving the Holocaust was a hoax. She claimed that wolves protected her, that she trekked 1,900 miles across Europe and killed a German soldier with her hands

— James Frey spun tales of alcoholism, drug abuse, prison and rehab, many of them false. He admitted to Larry King that although details of A Million Little Pieces were fabricated, “the emotional truth is there”

— J. T. Leroy, who wrote of his life as an HIV-positive teenage male prostitute in The Heart is Deceitful Above All Things, was actually Laura Albert, a woman of 40. Her sister-in-law appeared in public as Leroy, wearing a blond wig and dark glasses

— Vicki Johnson was revealed by The New Yorker as author of A Rock and a Hard Place: One Boy’s Triumphant Story, but claimed to be the writer’s adoptive mother

— Norma Khoury sold half a million copies of her “memoir” of fleeing Jordan under a fatwa. She had actually lived in Chicago since she was 3 and had a husband and two children, despite claims in the book that she was a virgin

Sources: Times Archive, USA Today, Vanity Fair, The New Yorker

Explore Books

• Book Extracts

• Book Reviews

• Books Group

• Audio Books

Times Recommends

• The 100 Best Books of the Decade
• The Times picks the 50 best paperbacks of 2009
• The conversation: James Ellroy