Former IMF chief Dominique Strauss-Kahn was released from house arrest and had his $6m (£3.7m) cash bail and bond returned after prosecutors said the hotel maid made false statements. He smiled as he left the courtroom with his wife, Anne Sinclair.
Strauss-Kahn, 62, still faces charges that he sexually assaulted the woman in New York but questions about her credibility appear.
The case has hinged on the accuser, a 32-year-old Guinean immigrant who cleaned the suite at the Sofitel hotel in Manhattan where Strauss-Kahn was staying.
Prosecutors found issues with her asylum application, tax return and statements to the grand jury investigating the assault case, court documents showed.
The New York Times quoted law enforcement officials as saying prosecutors had found possible links between the accuser and people involved in drug dealing and money laundering.
The paper reported on Friday that in particular, prosecutors were alarmed by a phone call she made within 28 hours of the alleged assault to a jailed boyfriend in Arizona. When investigators confronted her with bank records showing deposits of thousands of dollars in accounts in her name in Arizona, Georgia, New York and Pennsylvania, the woman, who had repeatedly said that her Sofitel job was her only source of income.
The officials believe the woman also lied on her application for asylum in the US, particularly over an allegation that she had been raped while at home in Guinea, in West Africa.
The case is now close to collapse, US media reports say.
And the story from the victim is being challenged. “The man who had been written out of the script for next year’s presidential elections is potentially back in the running.”