He was certainly an authority on espionage, writing novels & giving lectures on the subject. He also spent a great deal of time in Eastern Europe between the wars writing his travel books.
At present, I believe the rumours to be exaggerated.
Reading his autobiography, he entered WW1 aged 17 having lied about his age. Being reasonably fluent in French, he was co-opted by his regiment's French liason officer (who did work in counter intelligence) and was occassionally taken from the trenches, to go undercover in Paris to counter loose talk about troop movements that German spies were gleaning from Allied troops on leave, in cafes and brothels.
He based his fictional character 'Papa Pontivy' on this French Officer.
His 1935 novel 'Spy' was written in the first person and may be the source for the rumours that he was himself a spy.
According to his autobiography, he reached the rank of Staff Sergeant, not Captain as reported on the internet.
In the interest of selling novels, both Bernard Newman and his publisher, Victor Gollancz, mischievously promoted the fictional novel 'Spy' as a true account of his WW1 service.
The modern, lazy, cut & paste internet generation can be forgiven, but the 1968 New York Times obituary is more of an abberation, and perhaps needs to be addressed.
Unanswered questions under investigation
In a 1942 lecture given in Canada his is introduced as Captain Newman. Was he given honorary rank after the war?
There is still the allegation that he passed a report about the Peenemunde rocket site a full 2 years before current historians accept.
More work ongoing...
Discussed on Magonia Website