TIJUANA, Mexico - Detained Mexican tycoon and former city mayor Jorge Hank Rhon walked free on Tuesday, days after the army found a weapons cache in his home, in an embarrassment for President Felipe Calderon.

Hank Rhon, an eccentric former mayor of Tijuana who collects exotic animals and owns a soccer team, casinos and a racetrack, was arrested on June 4 with a stash of 40 rifles, 48 pistols and a gas grenade.

The high-profile case against him collapsed after judges dismissed the charges of possession of weaponry without permits, citing lack of evidence. An attempt to hold Hank Rhon for 40 days to investigate accusations that he was involved in a murder also fell through, his lawyers said.

Mexico's attorney general's office later appealed the judge's decision to throw out the weapons possession charges. It did not mention the murder accusations.

The 55-year-old Hank Rhon, who belongs to a prominent family linked to the opposition Institutional Revolutionary Party, or PRI, left the hotel where he was being held in Tijuana across from San Diego, California on Tuesday afternoon.

"The arrest did not go through," his lawyer, Luis Javier Algorri, told Reuters by telephone as he left the hotel in the same vehicle as the former mayor.

With a shaggier beard after spending eight days in prison before his transfer to a hotel, Hank Rhon was swarmed by supporters shouting "Hank, Hank!" and then was driven away in a sports utility vehicle.

Hank Rhon, who often sports a red crocodile-skin vest and was mayor of Tijuana from 2004 to 2007, denies any wrongdoing and says he had no knowledge of the arsenal on this property.

He also denies accusations that he was behind the murder of a 24-year-old woman who was dating one of his sons.

The dramatic night raid by soldiers on Hank Rhon's huge compound was a rare and bold move by the federal government against a man who many Mexicans see as a personification of the impunity of the country's rich. Calderon is seeking to show that no one is above the law as he fights ruthless drug gangs with huge arsenals that include rocket launchers.

Mexicans have criticized Calderon for not going after powerful business people and politicians in his war on the cartels, which he launched on taking office in late 2006. Some 40,000 people have died in the conflict since then.

The arrest's flop underscores Mexico's weak justice system, in which prosecutors often fail to build strong cases, judges are vulnerable to corruption and poor, jobless youngsters often end up being framed.

In 2009, Calderon sent the army to arrest 35 public officials in Michoacan, the president's home state, accusing them of corruption. But the cases also fell through and all but one of the accused were soon freed.