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Dominique Strauss-Kahn Released from House Arrest

Harold Cunningham/Getty Images(NEW YORK) -- A smiling Dominique Strauss-Kahn, the former head of the International Monetary Fund, left Manhattan State Supreme Court on Friday, arm in arm with his wife, Anne Sinclair, after he was released on his own recognizance and without bail.

Prosecutors said the case had "substantial credibility issues," ABC News learned Thursday night, and the District Attorney's office told the court Friday that it had reason to "reassess its position about the strength of the case."

The court ruled that the bail order be vacated, as well as the multimillion-dollar cash bond.

Despite the setback, the New York District Attorney's office did not move to dismiss the case and prosecutors noted that the alleged sexual assault was corroborated by forensic evidence. The district attorney's investigators have uncovered significant issues with the account of the maid who alleged that Strauss-Kahn assaulted her in a New York City hotel room.

Meanwhile, Lisa Friel, the chief of the Manhattan district attorney's sex crimes unit, has resigned the post she held for nearly a decade, ABC News has confirmed. Her resignation Wednesday, first reported by The New York Times, comes as one of the office's most high-profile sexual assault cases continues to unravel.

Discoveries that the Sofitel hotel maid considered financial gain, had questionable relationships with at least one alleged drug dealer and other issues in her past prompted prosecutors to present their findings to the defense, according to law enforcement officials and other people familiar with the case.

While prosecutors were initially extremely confident in their case after Strauss-Kahn's May 14 arrest, as soon as they realized it was unraveling, they did what was proper and contacted the defense. Senior prosecutors met with lawyers for Strauss-Kahn and provided details about their findings, ABC confirmed.

Strauss-Kahn, a leading candidate for the French presidency before being accused of sexually assaulting the woman, resigned his powerful position as head of the IMF in the wake of the allegations against him.

Copyright 2011 ABC News Radio

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