Musampa, 48, was arrested by Dutch authorities on Tuesday after allegedly committing almost £100,000 in tax fraud.
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According to reports in the Netherlands via talkSPORT, the Netherlands' Fiscal Information and Investigation Service (FIDO) claim he has been accused of defrauding the authorities out of over €100,000.
The former Man City winger declared he was an overseas tax resident whilst working and receiving an income in the country.
New reports have now stated that he was released from custody Wednesday afternoon following a raid on his home.
Musampa one-and-a-half seasons on loan at City between 2005 and 2006, making 45 appearances across all competitions and scoring four goals.