The 50-year-old Australian man identified as Paul “Doug” Peters was was arrested without incident.
Mr Peters, who flew between Australia and the United States for work and has family in both countries, had been living in Sydney for six weeks before August 3.
Australian police say regarding Mr Peters, that they were “confident that he is responsible for the crime” and that no other suspects were being sought.
The bomb hoax was still being treated as an extortion attempt. Mr Peters had not been known to police before this case.
Mr Peters had some connection to the Pulver family, but no “direct links”. He was not believed to have been inside the Pulver home before.
The story of the fake bomb attached to 18-year-old Madeleine by a balaclava-clad intruder at her Sydney home on 3rd August made headlines around the world.
For 10 hours police and bomb disposal experts worked to dismantle the device which was later found to be an elaborate fake. Police say the attack was an extortion attempt.
Mr Peters was arrested by an FBI SWAT team and two NSW detectives in a wealthy neighbourhood in La Grange, Kentucky.
Paul “Doug” Peters, is listed as a resident of a five-bedroom, four-bathroom, three-car garage home on Heather Green Boulevard, La Grange, a quiet town of 5000 people, 48 kilometres north-east of Louisville.
His former wife, Debra Peters, is also listed on the US property.
A neighbour on the street, who asked not to be named, said his family was “aware” of the Peters family but “didn’t see them very much”. “They had some older children,” he said.
The neighbour said he believed the Peters were the second family to move into the 400-square-metre home, which was built – along with the rest of the houses on the street – only five years ago.
He could not say how long the Peters had lived on Heather Green Boulevard, but added that they had lived in the house once, before moving out and moving in again, and said the two-storey house had been for sale for some time.
He described the area as surrounded by cornfields and a golf course and “very quiet”. It was “filled with children” as it was less than half-a-kilometre from primary and high schools.
“It’s a nice neighbourhood … with sidewalks and street lights.”
The neighbour said he had not been aware of the Pulver case until media reports about Mr Peters’s arrest.
But he passed on a message from the residents on the street.
“The families in this neighbourhood hope that girl [Ms Pulver] has a great life,” he said.
There was nothing unusual about Mr Peters when he returned to La Grange a little over a week ago, another neighbour said.
He continued to walk the streets in pressed khakis and neat button-downs.
His three teenage daughters appeared to suspect nothing of the crime over which he is now accused.
“He was very passive,” the neighbour said. “Always threw his hand up. Always said: ‘G’day.'”
“He was a really unassuming, nice person,” the neighbour said. “He just looked like he fitted into the neighbourhood. He wasn’t scary at all.”
The Peters family moved to La Grange about four years ago – although it wasn’t until about two years ago that Mr Peters started to appear regularly.
Neighbours assumed he was semi-retired but did not know what he did for work.
Sometimes he would look after the house and his daughters while his former partner stayed with family in New Jersey. Sometimes they would stay together.
“I don’t think there was any personal relationship there,” the neighbour said.
As an FBI investigator combed through items on shelves in the garage, neighbours who declined to identify themselves told The Associated Press that they did not know the Peters and that they kept to themselves.
Another neighbour, who did not give his name, said he and his daughters, who were finishing their school work, were at home when the FBI SWAT team “came in heavy and hard” into the house next door.
“We had guys with machineguns in our backyard,” he told AP, adding that there were no sirens and no shots were fired.
He and his wife told AP that Mr Peters probably spent about six months out of the past two years at the house.
He said they did not know the Peters but that there were no problems with them and they were “congenial” neighbours.