Officials: Source made up nuclear plot

WASHINGTON (CNN) -- The man who was the source of intelligence that terrorists might be plotting to use a stolen Russian nuclear weapon against New York City is "a fabricator" with "delusions of grandeur," U.S. officials said Wednesday.

The existence of an intelligence report on the source's allegations was first reported in Time magazine.

"The only scandal here is that the Defense Intelligence Agency ever used this guy as a source of anything," said one official.

The officials said the man has declined to allow them to make public his name, but they said he is a U.S. citizen who claimed he overheard the alleged plot being discussed in a Las Vegas casino three weeks after the attacks of September 11.

Even the first report concerning the man's assertions noted that he was considered "not credible" officials said.

A U.S. official expressed regret that the report warning of the possible attack was "leaked without context causing unnecessary concern to Americans, especially New Yorkers."