Prosecutors dropped terrorism charges Tuesday against two Michigan men who were arrested after buying large numbers of cell phones, saying they couldn't prove a terrorism link.

The dismissal, in a one-page court document, came the day after Washington County Prosecutor James Schneider said he didn't have enough evidence to present the felony charges to a grand jury.

Ali Houssaiky and Osama Sabhi Abulhassan, both of Dearborn, Mich., left prison after paying a reduced bond on the remaining misdemeanor counts of falsification.

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"We know it was just a matter of time. We were just hoping it wouldn't be forever," Abulhassan said. "Everybody knew we were innocent. We knew we were innocent."

The remaining counts stem from allegations that the two men initially gave deputies different names than appeared on their IDs. The men also initially said they were buying phones for a relative's construction business, then changed the story when deputies asked for contact information, Schneider said.

Schneider said his office and federal authorities don't believe "the defendants pose an imminent threat at this time."

But he said the investigation remains open and he could still present evidence to a grand jury to pursue terrorism-related charges.

The FBI and the U.S. Department of Homeland Security sent bulletins early this year warning police departments nationwide to be alert for bulk purchase of prepaid TracFones, which could be used to finance terrorism.

Within days of the Ohio arrests, three Palestinian-American men from Texas were charged in Michigan after nearly 1,000 cell phones were found in a van they were driving.

In the Michigan case, the FBI said Monday that it had no indication that the men had any ties to known terrorist groups. Local prosecutors, however, were standing by the charges.

Prosecutors have not said what they believe the three men intended to do with the phones, though officials have said cell phones can be used as detonators and the Coast Guard increased its patrols of the 5-mile-long Mackinac Bridge after the arrests.

Relatives of the men said they were just trying to make money by reselling the phones and were targeted because of their Arab backgrounds.

In Ohio, Houssaiky and Abulhassan were stopped by sheriff's deputies for a traffic violation Aug. 8, then arrested after the deputies found 12 cell phones, $11,000 cash, airplane passenger lists and information on airport security checkpoints in their car, authorities said.

Prosecutors have not provided details about the passenger lists or their significance. Defense lawyers have said the flight information consisted of old papers left in the car by a relative who worked at an airport.

The two men acknowledged buying about 600 phones in recent months at stores in southeast Ohio, according to authorities. Investigators said they sold the phones to someone in Dearborn, a Detroit suburb.

Houssaiky's sister, Diana, 22, also of Dearborn, said outside the courthouse, "Today is a good day because we get to see my brother and our family will be whole again."

The men had been held on $200,000 bond, but that was reduced to $1,000 each.

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