We heard from the author of a new book at the center of a controversy over the Reverend Jerry Falwell. The New York Daily News wrote Wednesday that Falwell died poor, losing most of his fortune in a failed $20-million real estate development.

And the journalist cites that new book, Falwell Inc., by Dirk Smillie as the source for these claims. We talked with the family and Liberty officials and they are upset by this. We heard from Smillie, the book's author and he too says the Daily News flat out got it wrong.

Wednesday night, Smillie emailed the Falwells apologizing for what he calls a 'headache'.

Jerry Falwell Jr., Chancellor of Liberty University (web) - "It just irresponsible journalism."

When Jerry Falwell Jr. first heard the news Wednesday afternoon, he thought it was from a tabloid.

Falwell -"It was New York Daily News. So normally you don't expect a daily newspaper just to manufacture and fabricate stories like this."

The story that claimed Falwell Sr. lost tons of money in the real estate development Liberty Village. Falwell Jr. says a New York developer went bankrupt on the Candler's Mountain development, but the only connection Falwell senior had to that project was a contract to air promotions on the Liberty Broadcasting Network. When the project failed, The Falwells say their non-profit ministry didn't see a penny.

Dr. Ron Godwin, Vice-Chancellor of Liberty University - "He didn't own any part of that project on the mountain. Did not lose any money from that. So the article was entirely, totally false."

Dr. Godwin says he knew the late-Jerry Falwell's finances as well as anyone outside the family.

Godwin - "When Dr. Falwell died, he left his widow, he left this ministry, he left Liberty University in the best financial condition that its ever been in its entire history."

Jerry Jr. sent ABC-13 News an email he received from Shallon Lester, the woman behind the New York Daily News Article. Lester writes, "The information we reported came from Mr. Smillie's book. You are inaccurately saying that this story was the result of the Daily News own reporting."

Falwell Jr. also sent us an email from Falwell Inc.'s author, Dirk Smillie. The email says in part, you are absolutely right, "I did an interview with the reporter for that Daily News column yesterday but was dumbfounded as to how they could have extrapolated the item they went with re: Liberty Village." The email goes on to say, "your press release is right on the money, am glad you issued it."

In a press release, Jerry Falwell Jr. says the Daily News article is wrong about a lot of things. In fact, Liberty University currently uses the Liberty Village site to house graduate and married students.