Jewish groups are upset that the initial reporting about the anti-Islam movie known as "Innocence of Muslims" depicted the film as being financed by a group of Jewish donors.
The groups say the reporting was irresponsible and even dangerous.
"We are greatly concerned that this false notion that an Israeli Jew and 100 Jewish backers were behind the film now has legs and is gathering speed around the world," Abraham Foxman, national director of the Anti-Defamation League said Thursday. "In an age where conspiracy theories, especially ones of an anti-Semitic nature, explode on the Internet in a matter of minutes, it is crucial for those news organizations who initially reported on his identity to correct the record."
The Simon Wiesenthal Center also blasted the early media coverage of the story.
The center said Thursday it is "deeply troubled that the project was initially falsely and widely depicted as a project of an American- Israeli and that the $5 million was raised by 100 Jews. We remain deeply worried that those initial media reports are being used by Islamist extremists to further fan the violent anti-Semitism that is a part of that sub-culture of hate."
The crude film has stirred violent protests in Egypt, Yemen, Tunisia, Morocco, Sudan, Iran, Iraq, Israel and the Palestinian territories. Mobs attacked the U.S. Consulate in the Libyan city of Benghazi this week leaving the ambassador and three other Americans dead.
Initial reports including one in the Wall Street Journal that the filmmaker was a 52-year-old Israeli-American from California named Sam Bacile and that Jewish donors had financed his film.
In the Wall Street Journal report early this week, the filmmaker said the film "was a political effort to call attention to the hypocrisies of Islam."
On Thursday, multiple media agencies, including CNN, seemed to get closer to the true identity of the filmmaker and the financing for the troubling film.
Federal officials now believe the man behind the film is Nakoula Basseley Nakoula, who was convicted in 2009 of bank fraud. Media staked out the man's home Thursday and a friend said he is in hiding.
A production staff member who worked on the film told CNN that he believed the filmmaker was a Coptic Christian. The production staff member, who did not want to be identified, said when the two spoke on the phone during production, the filmmaker said he was in Alexandria, Egypt, raising money for the film. There has been a long history of animosity between Muslims and the minority Copts in Egypt.
Though the truth about the film's backing seems to be emerging, some say it took too long for reporters to begin investigating the filmmakers claims.
"There were at least seven obvious reasons that 100 Israeli Jews could not have been behind this crappy video," said Rob Eshman, editor-in-chief of the Los Angeles-based Jewish Journal. "Right from the beginning there were so many red flags and it is the media's job not to just parrot the story but to really find out if it is true."
The amateurish production of the film was one of the biggest clues that it could not be backed by millionaires of any faith, Eshman said.
"It looks like it was made with 29 dollars really," Eshman said. "In the grand scheme of things this is not a tragedy compared to the people who are losing their lives in Libya, but it could have led to more tragedies. The (initial) news that it was Jews behind the film should have never been reported in the first place – it feeds into people's prejudice."