Dominique Strauss-Kahn freed from house arrest

NEW YORK - Questions from prosecutors about the credibility of the hotel housekeeper who accused former IMF leader Dominique Strauss-Kahn of sexual assault led to him walking out of court without bail and free from house arrest Friday.

The stark turn in the case came after the woman admitted to prosecutors she had made up a story of being gang raped and beaten in her homeland to enhance her application for political asylum, prosecutors said in a letter to defense lawyers.

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She also misrepresented what she did after the alleged attack — instead of fleeing to a hallway and waiting for a supervisor, she went to clean another room and then returned to clean Strauss-Kahn's suite before telling her supervisor that she had been attacked, prosecutors said.

She also misrepresented her income and claimed someone else's child as her own dependent on tax returns, they said.

At Friday's hearing, the prosecutor said the district attorney's investigation has "caused us to reassess our position on the strength of the case," CBS News investigative producer Pat Milton reports.

The details speak to the maid's credibility and whether her story would stand up under oath in a prosecution that would rely heavily on her testimony.

Strauss-Kahn had been confined for weeks to a ritzy Manhattan loft on $6 million in cash and bond. The charges, which include attempted rape, have not been reduced, but the changes signal that prosecutors do not believe the accusations are as ironclad as they once seemed.

The developments represent a stunning reversal of fortune for the man whose financial and political career all but disintegrated when he was arrested just six weeks ago, CBS News correspondent Elaine Quijano reports.

The 32-year-old hotel maid accused Strauss-Kahn of chasing her through his luxury suite in May, trying to pull down her pantyhose and forcing her to perform oral sex. Authorities have said they have forensic evidence of a sexual encounter, but defense lawyers have said it wasn't forced.

"It is a great relief," said Strauss-Kahn's attorney, William Taylor. "It is so important in this country that people, especially the media, refrain from judgment until the facts are all in."

A smiling Strauss-Kahn, wearing a dark suit and light blue tie, shook the hand of his attorneys as he left the courtroom with his wife, French journalist Anne Sinclair, Milton reports.

During the hearing, Strauss-Kahn stood quietly, hands folded in front of him and flanked by his two high profile attorneys, Benjamin Brafman and Taylor, as State Supreme Court Justice Michael Obus told him his bail was being revoked and that he would be released in his own custody pending his next court appearance July 18, Milton reports.

"The case is not over as you have heard," Obus said during the nearly seven-minute-long hearing.

The prosecutor said the district attorney's office wasn't dismissing the case against Strauss-Kahn at this time, Milton reports. His passport and other travel documents were not returned.

"Prosecutors wouldn't have agreed to allow Strauss-Kahn out of house arrest if they still felt they had a strong rape case against him," CBS Radio News legal analyst Andrew Cohen reports. "On the other hand, it's telling that they haven't yet released his travel documents, which means they still want him in the states and under the jurisdiction of American courts."

After his arrest, Strauss-Kahn resigned from his post leading the International Monetary Fund and watched his presidential ambitions seemingly crumble.

The woman's attorney, Ken Thompson, fired back outside court, saying the district attorney's office was backing away from the case because it was too scared to prosecute it. He said she would come out in public to tell her story but didn't specify when.

Thompson said the woman went to the district attorney with information that her asylum application was flawed, but that she exaggerated on it because she was scared she would be sent back to Guinea. He said she came to the U.S. because she was a victim of female genital mutilation, and she worried her daughter, now 15, would be victimized as well. He also said she had been raped by soldiers there, but that attack did not occur as it was written in her asylum application.

Thompson did not back down on the seriousness of the charges, delivering intimate and specific details from her perspective on a violent attack, saying Strauss-Kahn bruised her vagina, tore a ligament in her shoulder and ripped her stockings.

"When she was fighting to get away, when she was on her knees and he was sexually assaulting her, after he finished, she got up and started to run to the door and started spitting Dominique Strauss-Kahn's semen out of her mouth in disgust all over that hotel room," he said.

Investigators have said they found traces of his semen on her uniform."From day one she has described a violent sexual assault that Dominique Strauss-Kahn committed against her," Thompson said. "She has described that sexual assault many times, to prosecutors and to me, and she has never once changed a single thing about that encounter."

Thompson also referred to media reports that his client was involved with a drug dealer, calling them lies.

The New York Times, quoting law enforcement officials it didn't name, reported that the woman was recorded on the phone with an incarcerated man around the day she made the allegations, discussing whether to press her case in court.

The newspaper said the man had been arrested on marijuana possession charges and had deposited cash in the woman's bank account.

"It is clear that this woman made some mistakes, but that doesn't mean she's not a rape victim," Thompson said.

Strauss-Kahn arrived at the courthouse Friday morning in a Lexus SUV and strode confidently up the granite steps with his wife at his side.

After the hearing, he slowly walked out the building with his arm on her shoulder, smiling at the throng gathered outside.

He will not yet be allowed to leave the country. Brafman said Strauss-Kahn would be free to travel within the United States.

Prosecutors offered few details inside court on the turn in the case. Assistant district attorney Joan Illuzzi-Orbon said a further investigation caused them to reassess it.

"At the time this case came to the district attorney's office, we were faced with a credible claim of a serious sexual assault," she said, noting the accuser had promptly reported the alleged attack and had a "solid work history."

Obus, in releasing Strauss-Kahn, said there would be no rush to judgment either way.

Illuzzi-Orbon said, "Although it is clear that the strength of the case has been affected by the substantial credibility issues regarding the complainant, we are not moving to dismiss the case at this time."

If the case collapses, it could once again shake up the race for the French presidency. Strauss-Kahn, a prominent Socialist, had been seen as a leading potential challenger to conservative President Nicolas Sarkozy in next year's elections — until the New York allegations embarrassed his party and led to his resignation from the IMF.

"Those who know Dominique Strauss-Kahn will not be surprised by this evolution of events," one of his French lawyers, Leon Lef Forster, told the AP in Paris. "What he was accused of has no relation to his personality. It was something that was not credible."

New doubts about Strauss-Kahn's accuser would also revive speculation of a conspiracy against Strauss-Kahn aimed at torpedoing his presidential chances. Within days of his arrest, a poll suggested that a majority of French think Strauss-Kahn, who long had a reputation as a womanizer and was nicknamed "the great seducer," was the victim of a plot.

Socialist Party chief Martine Aubry announced her own presidential bid this week, after having long been expected to throw her weight behind a Strauss-Kahn candidacy. French politician Michele Sabban said Friday that the Socialists should suspend the presidential primary calendar because of the new developments.

In arguing against his release in May, prosecutors cited the violent nature of the alleged offenses and said his wealth and international connections would make it easy for him to flee.

Strauss-Kahn was in New York on a personal trip when the maid made her accusations. Prosecutors have said in court that Strauss-Kahn appeared on surveillance tapes to be in a hurry as he left the hotel, though his lawyers have said he was merely rushing to lunch.

Strauss-Kahn was held without bail for nearly a week after his May arrest. His lawyers ultimately persuaded a judge to release him by agreeing to extensive — and expensive — conditions, including an ankle monitor, surveillance cameras and armed guards. He was allowed to leave for only for court, weekly religious services and visits to doctors and his lawyers.

The security measures were estimated to cost him about $200,000 a month, on top of the $50,000-a-month rent on the town house in trendy TriBeCa.

Under New York law, judges base bail decisions on factors including defendants' characters, financial resources and criminal records, as well as the strength of the case against them — all intended to help gauge how likely they are to flee if released.