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A Manhattan judge dismissed all charges against former International Monetary Fund chief Dominique Strauss-Kahn during a court appearance Tuesday, three months after he was arrested on charges of sexually assaulting a hotel housekeeper.

Strauss-Kahn appeared in Manhattan Supreme Court wearing a dark gray suit, blue shirt and navy-and-gold striped tie, smiled and shook hands with an audience member as his wife sat nearby. They left court without saying anything to reporters.

In his first public statement since he was charged with sexually assaulting a hotel maid, Strauss-Kahn thanked supporters and said was grateful to the prosecutor for agreeing to dismiss the case.

"These past two and a half months have been a nightmare for me and my family," he said. "I want to thank all the friends in France and in the United States who have believed in my innocence, and to the thousands of people who sent us their support personally and in writing. I am most deeply grateful to my wife and family who have gone through this ordeal with me."

"We will have nothing further to say about this matter and we look forward to returning to our home and resuming something of a more normal life," he said.

Strauss-Kahn faced a crowd of demonstrators outside the courthouse, carrying signs such as "The Evidence Speaks for Itself." Retired public school teacher Peg Rapp, one of the demonstrators, said, "I'm watching another very rich, powerful man buy his way out of a grand jury indictment, and a few, probably all-white, very well-to-do, connected, rich men making a decision in private, that this woman didn't deserve to have her case be heard."

A Question of Credibility

In making his ruling, Judge Michael Obus said, "I am satisfied that the People's recommendation was made in good faith."

Prosecutors said they could not pursue the criminal charges because of problems with the credibility of the accuser, Nafissatou Diallo. In the months since the the Sofitel Hotel housekeeper accused Strauss-Kahn of attempting to rape her, it was discovered she lied on her asylum application from her native Guinea and repeatedly lied to prosecutors while they gathered evidence.

In court, Head Prosecutor Joan Iluzzi-Orbon said, "We did not arrive at, nor do we take the decision to recommend dismissal, lightly." She added that the DA's decision to dismiss the charges did not in any way condone the conduct of Strauss-Kahn.

She explained to the judge that prosecutors had to prove that a sex act had occurred between Diallo and Strauss-Kahn by force and lack of consent.  To prove this, Iluzzi-Orbon said would depend almost entirely on the credibility of Diallo.

In the motion for dismissal recommendation filed Monday, prosecutors wrote, "the nature and number of the complainant's falsehoods leave us unable to credit her version of events beyond a reasonable doubt, whatever the truth may be about the encounter between the complainant and the defendant." The motion went on to say, "if we don't believe her beyond a reasonable doubt, we cannot ask a jury to."

In a statement, District Attorney Cyrus Vance said that no prosecutor expects or requires a perfect witness. "If we are convinced they are truthful about the crimes committed against them, and will tell the truth at trail, we will ask a jury to consider their testimony to prove a crime," Vance said. "If we are not convinced, we cannot, should not and do not take the case to a jury."

What concerned prosecutors, according to their motion, were the inconsistencies and falsehoods Diallo allegedly told them in "virtually every substantive interview" she had with them.

She told investigators in vivid detail that she had been gang raped in Guinea, but now she admits that was a lie. In their motion, prosecutors noted how persuasive and emotional Diallo was when she described that false gang rape — and that she described the crime with the same conviction with which she recounted the alleged Strauss-Kahn attack.

A Pattern of Inconsistencies

Prosecutors also hammered Diallo on her inconsistent statements about what happened right after the alleged attack. She told the grand jury that soon after the incident, she fled into the hallway and stayed there until she saw Strauss-Kahn leave.

In June, she changed her story. She said she went into another room to finish cleaning before going back into Strauss-Kahn's suite.

In July, according to prosecutors, Diallo (at right) changed her account again, saying that she really did just stay in the hallway until she saw Strauss-Kahn leave.

Diallo's attorney, Kenneth Thompson, filed a counter-motion to remove Manhattan District Attorney Cy Vance from the case. The motion was denied by Justice Michael Obus on Tuesday, and later dismissed on appeal.

Thompson said Vance had acted improperly by leaking false information to the press and refusing to refute "baseless articles in the New York Post" that alleged Diallo was a prostitute.

“The Manhattan District Attorney, Cyrus Vance, has denied the right of a woman to get justice in a rape case,” Thompson said outside the courthouse Monday.

Dominique Strauss-Kahn's attorneys Benjamin Brafman (L) and William Taylor (R)/ Nafissatou Diallo's attorney Kenneth Thompson outside of Manhattan Supreme Court on August 23. (Arun Venugopol/WNYC)

Diallo and Thompson had a short meeting Monday afternoon with the DA's office to discuss the decision not to move forward with the case against Strauss-Kahn.

"We have maintained from the beginning of this case that our client is innocent," said Strauss-Kahn's attorneys William Taylor and Benjamin Brafman in a statement released Monday. "We also maintained that there were many reasons to believe that Mr. Strauss-Kahn's accuser was not credible."

Strauss-Kahn, 62, was arrested after he was accused by Diallo, 33, of chasing her down and attempting to rape her when she arrived to clean his hotel suite in May. He denies the charges.

With the Associated Press

MOTION TO DISMISS:

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ORDER TO SHOW CAUSE:

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