Strauss-Kahn and the maid, the accuser had repeatedly lied.

Dominique Strauss-Kahn at a political rally he...

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The New York Times quoted what it said were two well-placed law enforcement officials as saying that although forensic evidence showed there had been a sexual encounter between the Strauss-Kahn and the maid, the accuser had repeatedly lied. It said prosecutors had discovered issues involving the asylum application of the 32-year-old housekeeper, who is Guinean, and possible links to criminal activities, including drug dealing and money laundering.

The paper added that prosecutors had discovered that the woman had had a phone conversation with an incarcerated man within a day of her encounter with Strauss-Kahn in which she discussed the possible benefits of pursuing the charges against him. The conversation was recorded.

It added that the man, who had been arrested on charges of possessing 400 pounds (180 kg) of marijuana, was among a number of individuals who had made multiple cash deposits, totaling around $100,000, into the woman’s bank account over the last two years.

Strauss-Kahn’s defense team had hired Guidepost Solutions, a New York based investigations firm, to work on the case and was also in the process of consulting with TD International, a consulting firm run by former CIA officers and U.S. diplomats.

People familiar with the case said at the time that the consultants and investigators were hired that Strauss-Kahn’s team was likely to look into the background of the alleged victim in the case, and that such inquiries would include an examination of her immigration status.

If the case unravels, it would be a huge blow for Manhattan District Attorney Cy Vance, the Democratic son of a former Secretary of State.

Prosecutors presented the Strauss-Kahn case before a grand jury, confident in the women’s story that the former IMF chief sprang naked from the bathroom, chased her down and hall and forced her to perform oral sex on him.

After his arrest, Strauss-Kahn was displayed before cameras in a “perp walk” that drew outrage in France. Some commentators suggested that Strauss-Kahn, known as the “great seducer” of French politics, could have been set up by opponents.

After a few nights in New York’s notorious Rikers Island jail, Strauss-Kahn was allowed to post $1 million cash bail and a $5 million bond. He is now under house arrest in a townhouse in the Tribeca neighborhood of Manhattan, where he is equipped with an electronic monitoring device and under the 24-hour watch of armed guards. The arrangements cost him $250,000 a month.