It was one of the strangest post-screening Q&As I’ve ever attended. It was the 2005 London Lesbian and Gay film festival. Among those on stage were Asia Argento, director and star of a movie called The Heart is Deceitful Above All Things, and JT LeRoy, author of the cult novel from which it was adapted. Plus someone called Emily Frasier. No one was quite sure who she was. The movie itself was a sleazy slice of southern gothic, ostensibly based on JT LeRoy’s own shockingly traumatic boyhood. Dragged away from his foster parents by his truck-stop prostitute mother (played by Argento), he is put through a gruelling gamut of rape, assault, exploitation, religious indoctrination and general abuse, at one point seducing his mother’s boyfriend (played by Marilyn Manson) while dressed as her.

Nothing in the film was as memorable as JT LeRoy himself: a slight, effeminate figure in a red fedora, big sunglasses and a blond wig. He looked like a skinny, white Michael Jackson impersonator. Everybody on stage seemed to be in awe of LeRoy. He was chronically shy, it was explained, hence the disguise. When a question was addressed to him, he answered in a nervous mumble, barely audible or decipherable. He would then whisper into the ear of Argento or Emily Frasier, and they would speak for him: “JT says …”

Variations on this bizarre ritual had been going on for several years, since LeRoy first appeared on the literary scene. LeRoy seemed to hit a cultural nerve with his lyrical, autobiographical prose, which revealed a West Virginian ecosystem of drugs, tricks, crime, abuse, damaged characters and fluid sexualities. The literary establishment embraced him, and he was hailed as an authentic voice in American literature, a new William Burroughs or Flannery O’Connor – albeit with a backstory that wouldn’t have looked out of place on Oprah.

LeRoy was shrouded in mystery. Was he HIV positive? Or transgender? Nobody knew his real name (the JT stood for “Jeremiah Terminator”), or even what he looked like, since he initially refused to appear in person. In his absence, fans began staging events reading out from LeRoy’s books themselves. Famous people began to gushingly declare their admiration. Soon he had amassed an impressive following: Debbie Harry, Lou Reed, Nancy Sinatra, Matthew Modine, Gus Van Sant, Rufus Wainwright, Shirley Manson, Jeremy Renner, Rosario Dawson, John Waters, Michael Stipe, Carrie Fisher, Winona Ryder, Courtney Love, Billy Corgan, Tom Waits. LeRoy achieved what many artists dream of: cult status combined with mainstream celebrity.

‘I’m a fool. How could I not see it?’ ... Italian director/actor Asia Argento (right) with JT LeRoy during a 2005 photocall for her film The Heart is Deceitful Above All Things. Photograph: Tiziana Fabi/AFP/Getty Images

Asia Argento, daughter of Italian horror maestro Dario, was what you might call a LeRoy superfan. When I interviewed her just after that bizarre Q&A in 2005, Argento told me she saw her movie as a form of therapy for JT. “We had to get as much as we could right,” she explained, “and a lot of it was to do with the fact that I love JT truly as a friend. He’s somebody who will be in my life for ever. It wouldn’t have been the same film if we didn’t trust each other.”

The trust turned out to be misplaced. Before Argento’s movie was released, it emerged that JT LeRoy did not actually exist. Exposés by New York magazine and the New York Times asserted that the figure in the Michael Jackson get-up was actually a woman named Savannah Knoop. The real author of JT LeRoy’s novels was Knoop’s brother’s partner: a 32-year-old Jewish New Yorker named Laura Albert, sometimes known as “Speedie”, though she also called herself “Emily Frasier”. Yes, that was her on stage with Argento and “JT”. As Speedie/Emily Frasier, Albert had accompanied her fictional avatar everywhere “he” went. She had been hiding in plain sight.

'It was a fiction that went way off the page. It raises the question of where does fiction come from? What is fiction?'

Literature is full of impostors and noms de plume, from George Eliot to “Robert Galbraith” (aka JK Rowling), but JT LeRoy is something else. George Eliot never did high-end fashion shoots, or received backstage passes to U2 gigs, or was sent Kabbalah books by Madonna. Some see Albert/LeRoy as a fraud on the make, a player exploiting the kindness and credulity of celebrities, care workers and fans; others regard her as a complex, postmodern artist, whose literary talent justified the masquerade. Was this one of the greatest literary hoaxes of the modern age? Or a strategic confidence trick?

“It was a fiction that went way off the page,” says Jeff Feuerzeig, director of new documentary Author: The JT LeRoy Story. “It raises the question of where does fiction come from? What is fiction? I found that to be interesting.” Having turned down previous approaches, Albert agreed to tell her story to Feuerzeig, partly on the strength of his 2005 music documentary The Devil and Daniel Johnston, but also, she told him, “Because you’re a Jew and you came out of punk rock.”

A still from the new documentary, Author: The JT LeRoy Story. Photograph: Dogwoof

Feuerzeig spent eight days interviewing Albert for his film, and two years going through her archives. She kept everything, it turns out: diaries, doodles, notebooks, phone bills, photo albums, answering-machine messages from celebrities (most of whom, understandably, declined to participate in the film). These ephemera not only enhance the movie visually, they also help corroborate an insanely far-fetched story.

Albert had childhood issues of her own, it turns out. She suffered sexual and physical abuse as a child. She was put in a care home by her mother. She had weight, food and body issues – which led to gastric-band surgery and dramatic change in appearance. Past photographs depict Albert as plump and round-faced, almost homely; in the film, talking in the present day, she looks like an ex-rock star, with defined cheekbones, and bohemian dress code.

Rather than the pen, it seems the telephone was Albert’s primary tool. She was a natural mimic. She developed an “addiction” to phoning child-protection hotlines pretending to be a boy, and would spend long hours improvising stories to elicit sympathy and attention, adopting a number of accents and personas. “I didn’t know who was going to bubble up,” Albert claims in the film. That’s how JT LeRoy emerged, almost by accident. A therapist (who had never met her face to face) encouraged JT to write down his experiences. By that time – the late 1990s – Albert was in San Francisco, following her dream of becoming a musician, but making most of her income working on phone-sex lines, which is where she got much of the material she later put into JT’s fiction.

Filmmaker Jeff Feuerzeig with Laura Albert in January 2016. Photograph: Jeff Vespa/WireImage

Channelling JT’s persona made Albert a better writer, she says. It also made her a hotter literary property than a 30-year-old mother, as she then was, would have made. “JT” spent many additional hours on the phone cultivating relationships with writers who worked in a similar idiom, such as Dennis Cooper and Bruce Benderson. When Albert faxed them this teenage amateur’s writings, they were duly amazed, as were the publishers they put JT in touch with. “Laura felt like a zero her whole life,” says Feuerzeig. “She was uncomfortable in her skin, and she only felt alive inside another fictional persona. She was obviously always a writer. And when her art became validated, she surfed this wave. Nothing was preplanned.”

Events began to spiral out of control when Albert took the step of recruiting Savannah Knoop, her boyfriend’s half-sister, to be JT in real life. They strapped down her breasts and put on the Michael Jackson disguise. In turn, Albert became “Speedie”, adopting a parody cockney accent. In retrospect, it sounds ridiculous, but nobody seemed to bat an eyelid.

They met Gus Van Sant, who wanted to adapt LeRoy’s first novel, Sarah. Van Sant’s actor buddy Michael Pitt took a shine to “JT” (ie Knoop) and they ended up necking in the car park. Van Sant also commissioned LeRoy to write a screenplay (later jettisoned) for his acclaimed movie Elephant – he’s still credited as an associate producer. Asia Argento was launching her own charm offensive to secure the rights to The Heart is Deceitful … and developed an intimate bond with Knoop. When the truth about Albert/LeRoy/Frasier emerged, I simply assumed that Argento had been in on the whole charade when we had met in 2005, but she wasn’t. “It’s the most shocking thing that’s happened to me in my life, and believe me I’m the queen of shock,” she says when I contact her again. “Not even my father could come up with such an intricate plot.”

‘LeRoy’ with Winona Ryder, one of many celebrity admirers, at the Public theater in New York. Photograph: Dimitrios Kambouris/WireImage

Argento has not spoken about the experience since: “A way I thought I could get rid of the resentment was to just not talk about it. It is something I cannot forgive. Believe me it’s hard to carry this burden. I would be very grateful if one day this stops in me. I couldn’t do movies as a director for 10 years. Because I’ve been fooled. I’m a fool! How could I not see it? It made me feel worthless to be honest. I didn’t have a lot of self esteem after that. It took me a long time to rebuild it. I was lost. So forgiveness … it’s a beautiful thing, of saints and martyrs, but I can’t let it go. I was fucking manipulated, it’s time for me to say that.”

Events keep replaying in Argento’s mind: the long, intimate telephone conversations with JT, which were actually with Albert (she would often switch between “JT” and “Speedie” mid-conversation). JT explaining that he had a multiple personality disorder, and asking Argento to call him “Savannah” when they were together. “Imagine you are married and you come home one day and your husband is putting a mask on and underneath he’s a reptile, he’s a fuckin’ snake. It’s like a cheap TV movie from the 80s.”

Argento’s disorientation was compounded by her experience of making The Heart is Deceitful Above All Things. She strove to bring authenticity to her portrayal of a supposedly real person (JT’s mother), who turned out to be a fictional character invented by another fictional character. Relations cooled when “JT” (Knoop) discovered that Argento was having a relationship with Pitt.

By the time they were promoting the movie, Argento had started to tire of JT and Speedie’s company, she says: “They were like the Mariah Carey of independent movies. They were requiring, like, bananas from Peru and organic almonds and fashion gifts. I had to hook them up to get a Fendi bag, I kid you not. Speedie was just a pain in the ass. I was, like, ‘Who is this fucking boring, petulant bitch?’ While JT [Knoop] was always more joyful and fun – which I should have seen at the time: How are you so joyful when your life was so miserable?

Could the new documentary be seen as Albert’s attempt to regain control of her own narrative? It is framed as a cards-on-the-table confessional, but if nothing else, Albert has proved herself a notoriously unreliable narrator. “This is her version of events,” says Feuerzeig, although he alone decided what went into the film, he adds. “And yes, as you hear in the film, there’s a mosaic of responses. Some people are outraged, some think it’s the greatest thing since sliced cheese, and all of their responses are valid. The film doesn’t seek to moralise or judge.”

Feuerzeig’s film is not the only version of events, however. Knoop published her own book in 2008, Girl Boy Girl – How I Became JT LeRoy, in which she characterises her masquerade as a wild adventure, and Albert as a jealous manipulator, but expresses remorse over her relationship with Argento (which she nonetheless describes in intimate detail). James Franco bought the rights to Knoop’s book and reportedly plans to make a LeRoy biopic, starring Kristen Stewart as Savannah and Helena Bonham Carter as Albert.

Savannah Knoop and Laura Albert in 2007. Photograph: Paul Redmond/WireImage

There’s also an earlier documentary, The Cult of JT LeRoy, made in 2014, which paints a less rosy picture of the whole saga. Like Argento, many of its interviewees feel betrayed and manipulated. A succession of authors, agents and former associates JT befriended tell of how Albert – as JT – solicited emotional support, favours and gifts on false pretences. On being told by JT that he’d never had a birthday present, one of them sent her a present for every year of his life, another bought her a new computer, another cancelled his own Christmas on hearing that JT was going out turning tricks. “This person made me feel like if I didn’t talk to them, they were going to kill themselves,” one of them says. The Cult Of JT LeRoy also goes deeper into Albert’s 2007 trial and conviction for fraud, having signed a contract in JT LeRoy’s name rather than her own, then set up a company in the name of her alias.

“I think the tension of this story has to do with the ethics around what Laura Albert and company did to get ahead,” writes Marjorie Sturm, maker of The Cult Of JT LeRoy. “First off, the JT LeRoy enterprise was not just Laura Albert. It involved her mother, her sister, her sister-in-spirit [Savannah Knoop], and her partner/mate of many years [Geoff Knoop]. Were they all mentally ill? Or were they profiting and living off it? Was JT LeRoy just ‘bubbling out of her consciousness’ when she formed a corporation to hide JT’s money? When she actively promoted JT and drew in celebrities? Even if we give Laura Albert the benefit of the doubt and say JT was a coping mechanism, does that give her the right to abuse, lie, and exploit others?”

'JT was asbestos gloves to handle material I otherwise could not have touched,' Laura Albert writes

Sturm began making her own film in 2002, having first met “JT” and “Speedie” through a photographer friend. But when she began making her own inquiries, and talking to those drawn into the story, Albert’s lawyers threatened her with legal action, she alleges, which affected her film’s funding and distribution. “Laura’s expression took three personas to contain, but she isn’t too keen on allowing others to express themselves.”

Laura Albert does not see what she did as a lie or a hoax or a masquerade. She refers to her unmasking as “the reveal”. She has made various justifications for her actions in interviews over the years. One is that JT LeRoy was a valid artistic device – “art should confuse”. Another, which she explains to me via email, is that the LeRoy persona was her own, unique form of therapy.

“JT was asbestos gloves to handle material I otherwise could not have touched,” she writes. “Almost everybody does things that are self-therapeutic, and for me, nothing gets in there like writing does. [JT] began to write because his therapist urged him to do it – so that writing actually was a very literal form of therapy. As I say in the film, I had a college teacher who would not allow me to write in a male voice. I was writing about sexual and physical abuse. I had just left being in placement, being a ward of New York City, so it was all so raw for me. I ended up having a breakdown, dropping out of school and going into a hospital. I never went back to that school.”

Scene from Argento’s film The Heart is Deceitful Above All Things. Photograph: Everett/Rex/Shutterstock

Albert deals with accusations of manipulating people tangentially: “It’s been a process. It’s healing to connect to people who had a first-hand involvement with JT and were upset by the reveal, to talk and find connection. The media told people it was a joke – that’s what a hoax is. And that caused a lot of pain in those who loved him. The loss of JT, the pain is valid, but to understand my motives allows a more complex reaction to be possible. And time has allowed people to come back to the work and let it be of itself.”

That’s Albert’s ultimate defence: the work itself. “I was writing Jeremy’s [JT’s] story and publishing it as fiction, and everyone who was interested got a real live book in their hands,” she writes. “Since the reveal, I’ve heard from more people who understand the need to hide that I had then, how it freed my voice to have someone who wasn’t me. They recognise the felt authenticity of my fiction, the emotional truths.”

The question is whether or not those books have changed now that their author’s own convoluted story has all but eclipsed them. Is there a difference between “honest” fiction and “dishonest” fiction? LeRoy’s books are being reissued to coincide with the release of Feuerzeig’s documentary, so perhaps we’ll see. In the mean time, Laura Albert is currently writing her memoirs. As herself.

• Author: The JT LeRoy Story is in UK cinemas from 29 July and the JT LeRoy books Sarah and The Heart is Deceitful Above All Things (Little, Brown) will be available from 4 August