Strauss-Kahn spends first full day free of house arrest (AFP)

NEW YORK (AFP) – With the sex assault case against Dominique Strauss-Kahn hanging by a thread, damning new revelations emerged Saturday about his accuser, whose mounting credibility problems prompted the ex-IMF chief's release from house arrest.

Buoyed by a New York judge's order a day earlier to end all restrictions on him except foreign travel, Strauss-Kahn was enjoying his first full day of freedom -- as prosecutors scrambled to salvage some sort of case against the once high-flying French politician.

While the charges against Strauss-Kahn stand, the case has nearly imploded after prosecutors acknowledged their investigations of the accuser, a Guinea-born hotel maid, found she lied to a grand jury about the case.

In a letter to defense lawyers, Manhattan District Attorney Cyrus Vance said the woman had provided a "false" narrative of her life -- including a gang rape which she later admitted never occurred -- as part of her application process for US asylum.

Among other details gleaned about the maid were her possible links to criminal activities, including drug dealing and money laundering, a law enforcement official told The New York Times.

Within a day of the alleged rape attempt, the maid was recorded speaking on the phone with a boyfriend jailed for possessing 400 pounds (180 kilograms) of marijuana and discussing the benefits of pursuing charges, according to the newspaper.

When the conversation was translated from Fulani, the maid's native language, investigators became concerned.

"She says words to the effect of, 'Don't worry, this guy has a lot of money. I know what I'm doing,'" the Times quotes one of the officials as saying.

The paper said the man was one of several individuals who made multiple cash deposits totaling around $100,000 into the woman's bank account over the last two years.

The sensational twist raised hopes among Stauss-Kahn's ardent supporters that the case will collapse and the Socialist party favorite will return to frontline politics, possibly even as a candidate to challenge French President Nicolas Sarkozy in 2012 elections.

In a hint of just how possible a potential Strauss Kahn bid might be, fellow socialist Segolene Royal, a candidate in the presidential vote, said she had no problem delaying the process to make room for him.

But the current deadline for declaring in the Socialist Party primary is July 13 -- five days before Strauss-Kahn's next scheduled court appearance in New York.

And authorities will keep his passport pending possible trial, meaning he cannot travel outside of the United States, though his $1 million bail and $5 million bond will now be returned.

The Socialist Party heavyweight quickly took advantage of his newfound freedom after leaving a packed Manhattan courtroom Friday, celebrating over dinner with his wife and another couple at a posh Italian restaurant on Manhattan's Upper East Side.

The 62-year-old dined on pasta pappardelle with truffles, and the tab ran to around $600, according to the restaurant owner.

It was a stunning reversal of fortune for a man who spent days locked up in New York's tough Rikers Island jail in May.

Despite the maid's shattered credibility, Vance vowed to continue the investigations until prosecutors had uncovered all the facts.

"Today's proceedings did not dismiss the indictment or any of the charges against the defendant," he stressed.

Judge Michael Obus concurred, telling the court: "The case is not over.... In the meantime, there will be no rush to judgment."

Legal analysts, however, said the case was likely dead in the water and would be dismissed.

According to the accuser's initial grand jury testimony, she fled Strauss-Kahn's luxury hotel suite immediately after the May 14 attack and waited in the hallway before informing a supervisor.

But, prosecutors revealed, the 32-year-old subsequently changed her story, admitting she actually cleaned another room and even returned to start cleaning Strauss-Kahn's suite before alerting her bosses.

Strauss-Kahn's attorneys William Taylor and Benjamin Brafman said the disclosures "only further confirm that he will be fully exonerated."

Outside the courtroom, the maid's lawyer Kenneth Thompson admitted his client had made "some mistakes," but insisted forensic evidence would prove Strauss-Kahn was guilty of a brutal sexual assault.

Neighbors in the accuser's Bronx neighborhood, including many fellow Guineans, were philosophical.

"Maybe she lied. It just ends up hurting all Guineans if people have less then good intentions," said Tidiane Ba, speaking in French. "But we have to let the courts do their job."

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Strauss-Kahn freed from house arrest (AFP)

NEW YORK (AFP) – A US judge released Dominique Strauss-Kahn on his "own recognizance" Friday, but prosecutors who consented to the easing of bail restrictions did not agree to dismiss the sexual assault case against the former IMF chief.

The French politician was in a New York courtroom for a brief but extraordinary hearing that came in the wake of reports that prosecutors had grave doubts about the credibility Strauss-Kahn's accuser, and while sources suggested to US media that the case had serious problems, the judge stressed that the "case is not over."

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Strauss-Kahn free from house arrest; charges stand (AP)

By JENNIFER PELTZ and TOM HAYS, Associated Press Jennifer Peltz And Tom Hays, Associated Press – 47 mins ago

NEW YORK – Former IMF chief Dominique Strauss-Kahn walked out of court without bail Friday, freed from house arrest, after prosecutors acknowledged serious questions about the credibility of the hotel housekeeper who accused him of sexual assault.

The charges, which include attempted rape, were not dropped, but the easing of his bail conditions signaled that prosecutors do not believe the accusations are as ironclad as they once seemed.

"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."

After his arrest, Strauss-Kahn, 62, resigned from his post leading the International Monetary Fund and watched his presidential ambitions in France seemingly crumble. He had been confined for weeks to a luxury New York City loft on $6 million in cash and bond.

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.

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 of Guinea to enhance her application for political asylum, prosecutors said in a letter to defense lawyers.

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.

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.

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 said that Strauss-Kahn bruised the woman's genitals, tore a ligament in her shoulder and ripped her stockings, and that she fought to get away.

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 said that news reports saying his client was involved with a drug dealer were lies.

The New York Times, quoting unidentified law enforcement official, 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, French journalist Anne Sinclair, 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 was not given back his passport, and he will not yet be allowed to leave the country. His other attorney, Benjamin Brafman, said Strauss-Kahn would be free to travel within the U.S.

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."

State Supreme Court Justice Michael 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 Associated Press 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.

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 only for court, weekly religious services and visits to doctors and his lawyers.

The security measures were estimated to cost him $200,000 a month, on top of the $50,000-a-month rent on the townhouse in the city's TriBeCa neighborhood.

Under New York law, judges base bail decisions on such factors as the defendant's character, financial resources and criminal record, as well as the strength of the case — all intended to help gauge how likely the person is to flee if released.

Strauss-Kahn is slated to return to court July 18.

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Online:

Prosecutors' letter: http://www.courts.state.ny.us/press/index.shtml

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Maid lie sees Strauss-Kahn freed from house arrest (AFP)

NEW YORK (AFP) – Former IMF chief Dominique Strauss-Kahn was freed from house arrest Friday after prosecutors raised serious doubts about the credibility of the woman accusing him of sexual assault.

The sensational twist raised French opposition hopes that the sexual assault case will collapse and the Socialist party favorite will return to frontline politics, possibly even as a candidate to fight Nicolas Sarkozy for the presidency in 2012.

A smiling Strauss-Kahn, 62, appeared as if a large weight had been lifted off his shoulders as he left the frenzied atmosphere of the packed Manhattan courtroom, his arm affectionately draped on wife Anne Sinclair's shoulder.

Strauss-Kahn, whose $1-million bail and $5-million bond will now be returned, is free to travel anywhere he likes in the United States, though the authorities will hang onto his passport, pending possible trial.

According to the alleged victim's initial testimony to the grand jury, she fled Strauss-Kahn's luxury Manhattan hotel suite immediately after the May 14 attack and waited in the hallway before informing a supervisor.

But, prosecutors revealed Friday, the 32-year-old Guinean maid subsequently changed her story to say she actually cleaned another room and even returned to start cleaning Strauss-Kahn's suite before alerting her bosses.

"The complainant has since admitted that this account was false and that after the incident in Suite 2806, she proceeded to clean a nearby room and then returned to Suite 2806 and began to clean that suite before she reported the incident to her supervisor," District Attorney Cyrus Vance said in a letter sent to Strauss-Kahn's defense lawyers.

Despite shattering the credibility of the maid, Vance vowed that prosecutors would continue their investigations until they had uncovered all the facts.

"Today's proceedings did not dismiss the indictment or any of the charges against the defendant," he stressed.

Judge Michael Obus concurred, telling the court, "The case is not over, as we've heard. In the meantime there will be no rush to judgement on the case. We expect the process will go on."

But legal experts, such as CNN's Jeffrey Toobin, who admitted to being dumbfounded by the day's events, said the case was now heading in only one direction.

"It looks like this case is going to end with a dismissal of the case," Toobin said. "It's hard to imagine how there could be a trial at this point when the prosecution has essentially described its main witness as something close to a compulsive liar."

Outside the courtroom, the maid's lawyer admitted his client had made "some mistakes," but insisted the strength of the forensic evidence would prove Strauss-Kahn was guilty of a brutal sexual assault.

The lawyer, Ken Thompson, went on to relay in the most graphic detail yet the accusations against Strauss-Kahn.

"Dominique Strauss-Kahn came out running out of one of those rooms naked, towards her, and he grabbed her breasts first and started to attack her. He grabbed her vagina with so much force that he bruised her vagina."

Thompson said the attack was so violent that Strauss-Kahn ripped her stockings and tore a ligament in the maid's shoulder. "That is a medical fact. She now may need surgery for the damage he caused to her shoulder," he added.

"After he finished, she got up and started to run for that door and started spitting Dominique Strauss-Kahn's semen out of her mouth in disgust all over that hotel room."

Despite his defiance, Thompson admitted fearing the district attorney's office was "laying the foundation to dismiss this case."

"Our concern is that Manhattan District Attorney Cyrus Vance is too afraid to try this case. We believe that he's afraid that he's going to lose this high-profile case."

Strauss-Kahn attorney William Taylor thanked the prosecution for investigating the maid's credibility and said: "these disclosures reinforce our conviction that he will be exonerated."

Doubts over the maid's credibility mark a stunning reversal in the case that has upended politics in France and prompted a change in leadership at the International Monetary Fund at a time of major upheaval in the eurozone.

Word that the case might implode has raised hopes among France's opposition Socialists that a vindicated Strauss-Kahn might return to help them drive Sarkozy from office in next year's elections.

"It's a thunderbolt -- but in the opposite direction this time," said Socialist former prime minister Lionel Jospin.

Strauss-Kahn, who resigned from his high-profile post at the world's crisis lender on May 18 to fight the charges, was ordered to return to court for his next scheduled hearing, on July 18.

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Strauss-Kahn released from house arrest (Reuters)

NEW YORK (Reuters) – Former IMF chief Dominique Strauss-Kahn was released from house arrest on Friday after prosecutors said the hotel maid who accuses him of attempted rape lied to a grand jury and made other false statements.

Strauss-Kahn, 62, still faces charges that he sexually assaulted the woman in New York but questions about her credibility appear to be shifting the case in his favor in a twist that could upend French politics.

The former steward of the global economy smiled as he left court with his wife, Anne Sinclair, at his side.

Until his May 14 arrest, Strauss-Kahn was a strong potential challenger to Conservative President Nicolas Sarkozy in the 2012 election. Jubilant supporters in the French Socialist party hoped he might rejoin the presidential race but some analysts saw his chances as too tarnished.

Strauss-Kahn's lawyers want the charges dropped. The judge said prosecutors will reexamine the evidence after they revealed the maid lied to a grand jury about her actions after the alleged attack and on tax and immigration documents.

"I understand that the circumstances of this case have changed substantially and I agree the risk that he would not be here has receded quite a bit," Justice Michael Obus told the court as he released Strauss-Kahn.

"There will be no rush to judgment. The people will continue to investigate and reexamine the matter as appropriate."

Strauss-Kahn, whose house arrest had included electronic monitoring and an armed guard, agreed to return to court as needed, including for a July 18 hearing.

His bail payment of $1 million and bond of $5 million were returned to him but his passport was not, meaning he can travel only within the United States.

With his resignation on May 19, Strauss-Kahn severed all his ties to the International Monetary Fund. Christine Lagarde, who has just stepped down as French finance minister, takes over the top IMF job on Tuesday.

QUESTIONS EMERGE

The case has hinged on the accuser, a 32-year-old Guinean immigrant who cleaned the $3,000-a-night 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.

Prosecutor Joan Illuzzi-Orbon told the court "the facts of the sexual encounter was and is corroborated" but some details appear to have changed.

The woman initially said Strauss-Kahn assaulted her and she then cowered in the hallway outside his room until he left and she felt safe to seek help. Now, prosecutors say, she admits she cleaned a nearby room and then returned to Strauss-Kahn's suite to start cleaning before reporting the incident.

After the dramatic revelations, Strauss-Kahn's lawyer Benjamin Brafman said he wants the charges dropped.

"We are absolutely convinced that while today is a first giant step in the right direction, the next step will lead to a complete dismissal of the charges," Brafman said.

The woman's brother told Reuters in Guinea that she was the victim of a smear campaign.

Her lawyer, Kenneth Thompson, said after the hearing his client's story had never wavered and that Strauss-Kahn had bruised her badly and tore a ligament in her shoulder.

"The claim that this was consensual is a lie," Thompson told reporters. "She made some mistakes but that doesn't mean she is not a rape victim."

The New York Times quoted law enforcement officials as saying prosecutors found possible links between the accuser and people involved in drug dealing and money laundering.

They also discovered the woman made a phone call to a jailed man within a day of her encounter with Strauss-Kahn in which she discussed the possible benefits of pursuing the charges against him, the paper said.

The conversation was recorded. The man was among a number of people who had made multiple cash deposits, totaling around $100,000, into the woman's bank account over the last two years, The New York Times said.

Some commentators suggested that Strauss-Kahn, known as the "great seducer" of French politics, could have been set up.

His arrest opened the field for several other Socialist candidates for next April's presidential election, including party leader Martine Aubry, who trails colleague Francois Hollande in opinion polls.

Sarkozy, who nominated Strauss-Kahn for the IMF job, has not commented on the affair since his arrest. The case has prompted debate in France on gender equality and a media tradition of respecting the privacy of politicians' sex lives.

Nina Mitz, a former senior adviser to Strauss-Kahn at the French Ministry of Finance, said: "Today's stunning news can only make us regret that so much talent may have been wasted at a time when we all very much needed it."

(Additional reporting by Grant McCool, Christine Kearney, Paula Rogo and Bernd Debussmann Jr in New York, Mark Hosenball in Washington, Marie Maitre, Catherine Bremer and Geert De Clercq in Paris and Saliou Samb in Guinea; Writing by Mark Egan; Editing by John O'Callaghan)

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NYC police arrest IMF head in hotel sex assault (AP)

NEW YORK – The leader of the International Monetary Fund and a possible candidate for president of France was pulled from an airplane moments before he was to fly to Paris and was arrested Sunday in connection with the violent sexual assault of a hotel maid, police said.

Dominique Strauss-Kahn was taken off the Air France flight at John F. Kennedy International Airport by officers from the Port Authority of New York and New Jersey and was turned over to police for questioning Saturday afternoon, said Paul J. Browne, New York Police Department spokesman.

Strauss-Kahn was arrested at 2:15 a.m. Sunday on charges of a criminal sex act, attempted rape and unlawful imprisonment, and was awaiting arraignment, police said. His lawyer, Benjamin Brafman, did not immediately respond to phone or email messages seeking comment from The Associated Press.

The 32-year-old woman told authorities that she entered Strauss-Kahn's suite at the luxury Sofitel hotel not far from Manhattan's Times Square at about 1 p.m. Eastern time (1600 GMT) Saturday and he attacked her, Browne said. She said she had been told to clean the spacious $3000-a-night-suite suite, which she had been told was empty.

According to an account the woman provided to police, Strauss-Kahn emerged from the bathroom naked, chased her down a hallway and pulled her into a bedroom, where he began to sexually assault her. She said she fought him off, then he dragged her into the bathroom, where he forced her to perform oral sex on him and tried to remove her underwear. The woman was able to break free again and escaped the room and told hotel staff what had happened, authorities said. They called police.

When New York City police detectives arrived moments later, Strauss-Kahn had already left the hotel, leaving behind his cellphone, Browne said. "It looked like he got out of there in a hurry," Browne said.

The NYPD discovered that he was at the airport and contacted Port Authority officials, who plucked Kahn from first class on the Air France flight that was scheduled to depart at 4:40 p.m. and was just about to leave the gate.

The maid was taken by police to a hospital and being treated for minor injuries. John Sheehan, a spokesman for the hotel, said its staff was cooperating in the investigation.

Strauss-Kahn was briefly investigated in 2008 over whether he had an improper relationship with a subordinate female employee. The IMF board found his actions "regrettable" and said they "reflected a serious error of judgment."

William Murray, a spokesman for the IMF in Washington, said the IMF had no immediate comment. Strauss-Kahn's offices in Paris couldn't be reached when the news broke overnight in France, nor could French Socialist Party officials.

He was supposed to be meeting in Berlin on Sunday with German Chancellor Angela Merkel about aid to debt-laden Greece, and then join EU finance ministers in Brussels on Monday and Tuesday. The IMF is responsible for one-third of Greece's existing loan package, and his expected presence at these meetings underlined the gravity of the Greek crisis.

Strauss-Kahn took over as head of the IMF in November 2007. The 187-nation lending agency is headquartered in Washington and provides help in the form of emergency loans for countries facing severe financial problems.

Strauss-Kahn won praise for his leadership at the IMF during the financial crisis of 2008 and the severe global recession that followed.

More recently, he has directed the IMF's participation in bailout efforts to keep a European debt crisis which began in Greece from destabilizing the global economy.

In October 2008, Strauss-Kahn issued an apology to the IMF staff after accusations that he had a sexual relationship with an IMF subordinate.

"While this incident constituted an error in judgment on my part, for which I take full responsibility, I firmly believe that I have not abused my position," Strauss-Kahn wrote in an email to IMF staff.

The board found that the relationship was consensual. The IMF employee left the fund and took a job with the European Bank for Reconstruction and Development.

Before taking the top post at the IMF, Strauss-Kahn had been a member of the French National Assembly and had also served as France's Minister of Economy, Finance and Industry from June 1997 to November 1999.

He had been viewed as a leading contender to run on the Socialist Party's ticket to challenge the re-election of French President Nicolas Sarkozy.

Strauss-Kahn, dubbed DSK in France, was seen as the strongest possible challenger to Sarkozy in next year's presidential elections. Strauss-Kahn has not declared his candidacy, staying vague in interviews while feeding speculation that he wants France's top job.

The New York accusations come amid French media reports about Strauss-Kahn's lifestyle, including luxury cars and suits, that some have dubbed a smear campaign.

He sought the Socialist Party's endorsement in the last elections, in 2007, but came in second in a primary to Segolene Royal. Royal, the first woman to get so close to France's presidency, lost to Sarkozy in the runoff.

After Sarkozy won, the new president championed Strauss-Kahn as a candidate to run the IMF. Sarkozy's backers touted the move as a sign of the conservative president's campaign of openness to leftists — but political strategists saw it as a way for Sarkozy to get a potential challenger far away from the French limelight.

The global financial crisis thrust Strauss-Kahn into an unexpectedly prominent role and boosted his global standing in time to consider a 2012 French presidential bid.

He is credited with preparing France for the adoption of the euro by taming its deficit and persuading then-Prime Minister Lionel Jospin to sign up to an EU pact of fiscal prudence.

A former economics professor, Strauss-Kahn joined the Socialist party in 1976 and was elected to parliament in 1986 from the Val-d'Oise district, north of Paris. He went on to become mayor of Sarcelles, a working-class immigrant suburb of Paris.

His first government post was industry minister under former President Francois Mitterrand. As finance minister, he reduced France's debt repayments through a raft of privatizations including the sale of shares in France Telecom SA and Air France.

Strauss-Kahn is a married father of four. His third wife, Anne Sinclair, is a New York-born journalist who hosted a popular weekly news broadcast in France in the 1980s.

A security guard stood watch outside the Sofitel near busy Times Square on Saturday night, keeping everyone but guests out of the building.

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Associated Press writers Cristian Salazar in New York, Martin Crutsinger in Washington and Angela Charlton in Paris contributed to this report.

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