A judge formally ordered the dismissal of all criminal charges against Dominique Strauss-Kahn on Tuesday, but he said his order would be stayed until an appellate court decides whether a special prosecutor should be appointed.
Prosecutors in the office of Cyrus R. Vance Jr., the Manhattan district attorney, told Justice Michael J. Obus of State Supreme Court in Manhattan that they could not prove the case beyond a reasonable doubt because of serious credibility issues with the hotel housekeeper who had accused Mr. Strauss-Kahn of sexually assaulting her as she entered his suite to clean it.
The dismissal brought some semblance of vindication to Mr. Strauss-Kahn, 62, the former managing director of the International Monetary Fund, after his stunning arrest more than three months ago. He was taken into custody aboard an Air France jet at Kennedy International Airport and then paraded before news cameras, looking disheveled and in handcuffs.
For his accuser, Nafissatou Diallo, a 33-year-old Guinean immigrant, the result caps a precipitous fall. Prosecutors initially portrayed her as a credible and powerful witness, only to say that her myriad lies about her past — which included a convincing, emotional but ultimately fraudulent account of being gang raped by soldiers in Guinea — ended up undermining the case.
Ms. Diallo, who has made her identity public, still has a civil lawsuit pending against Mr. Strauss-Kahn for unspecified monetary damages, and her lawyer, Kenneth P. Thompson, has been relentless in his assertion that Mr. Strauss-Kahn sexually assaulted his client and that Mr. Vance’s office abandoned the case too soon.
Mr. Thompson made one last desperate attempt to keep the criminal case going, filing a motion on Monday asking that Mr. Vance’s office be disqualified. But about an hour before Tuesday’s hearing started, a court clerk handed out a one-page decision in which Justice Obus denied Mr. Thompson’s motion. However, Mr. Thompson has appealed the decision, which led to Justice Obus’s staying the dismissal.
After the hearing, Mr. Strauss-Kahn issued a statement, characterizing the past two and a half months as “a nightmare for me and my family,” and thanking the judge, his wife and family and other supporters.
He added that he was “obviously gratified that the district attorney agreed with my lawyers that this case had to be dismissed.”
“We appreciate his professionalism and that of the people who were involved in that decision,” he continued. Mr. Strauss-Kahn added that he looked forward to “returning to our home and resuming something of a more normal life.”
The case has attracted international attention ever since the arrest of Mr. Strauss-Kahn, a leading figure in the Socialist Party who was considered a top candidate for the French presidency; each appearance in court has drawn a carnival-like atmosphere outside, with journalists and camera crews mixing with protesters. The scene on Tuesday was no exception: Well before Mr. Strauss-Kahn arrived at 11:03 a.m., about three dozen protesters gathered. The bulk of the sentiments were decidedly against Mr. Strauss-Kahn.
There were chants (“D.S.K., shame on you,” and “Whatever we wear, wherever we go, yes means yes, no means no”). There were placards (“All rape victims deserve a fair trial,” “Stop victim blaming of rape victims” and one with an illustration of a police officer admonishing a top-hatted plutocrat and the slogan “Go to jail”).
And there were a few speeches in which people condemned Mr. Strauss-Kahn as a serial sexual abuser and criticized Mr. Vance for ending the case against him.
Dominique Strauss-Kahn 
Dominique Strauss-Kahn was freed of sexual assault charges yesterday after the New York courts found the accusations against him not credible. After the shocking arrest three months ago when Nafissatou Diallo accused Strauss-Kahn, the managing director of the International Monetary Fund, of assaulting her, the prosecutor deemed the accuser not credible due to previous false rape claims.

The ''New York Times'' quoted Strauss-Kahn saying the case has been "a nightmare for me and my family". ''Taiwan News'' also quoted Strauss-Kahn who 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."

On May 14, Diallo claimed that Strauss-Kahn forced her to interact in sexual activity in his hotel suite. DNA on Diallo's clothes confirmed an interaction but whether the encounter was forced or not was unsure. In July, she falsely told reporters she was assaulted in her homeland which erased her credibility. 

Diallo and her legal team made a last attempt in the criminal case, filing a motion on Monday asking that Mr. Vance’s office be disqualified but early Tuesday morning Justice Obus denied the motion. The encounter between Diallo and Strauss-Kahn was deemed to be consensual leading to Strauss-Kahn's freedom.

Strauss-Kahn is undergoing accusation in another sexual case in France. His lawyers have said this is also a false account.