Court documents show that Peters entered the Pulver family home about 2.15pm through the unlocked front door.
He was carrying a black aluminium baseball bat and a small backpack and had concealed his face with a multi-coloured balaclava when he cornered Madeleine in her bedroom.
Peters said: "I am not going to hurt you.''
Madeleine asked him what he wanted and he responded: "Sit down and no-one needs to get hurt.''
Peters took a black box from the backpack and pushed it against her throat, securing it around her neck with a bicycle lock that was attached to the device.
A typed email address was affixed to the box and read: "dirkstraun1840@gmail.com''.
A purple lanyard with a USB stick and a plastic document sleeve attached to it was also placed around Madeleine's neck.
Peters told her to count to 200 before he left her bedroom and told her he would be right back.
She remained seated on her bed, believing he was still in the house.
But after a few minutes, she yelled out and heard no response.
She sent text messages to her mother and father, asking them to call the police and then removed the two-page document from the sleeves.
The letter stated that the case was boobie-trapped and could only be opened safely if they complied with his terms and conditions.
"For the avoidance of any doubt, I am a former special forces green beret munitions specialist and have constructed such devices for over 20 years,'' the letter stated.
"SO, ACT NOW, THINK LATER, or YOU will inadvertently trigger a tragically avoidable explosion known in the American armed forces, as a BRIAN DOUGLAS WELLS event.''
The letter also warned not to tamper with the device or its combination buttons, otherwise it would result in an explosion.
"You will be provided with detailed Remittance Instructions to transfer a Defined Sum once you acknowledge and confirm receipt of this message,'' the letter stated.
"Should I (or my banking advisers or embedded informants) become aware that you, your family, or any person or entity has breached ANY CONDITION, BEFORE OR AFTER, the transfer of the Defined Sum, you do so at your family's own peril.''
About 6pm on August 3, nearly four hours after Peters entered the home, Mr Pulver sent an email in the presence of police from his mobile to the Dirk Straun address.
"Hi, my name is Bill. I am the father of the girl you strapped the device to. What do you want me to do next? Bill'', the text message read.
The court documents show Peters accessed the email account three times from a library at Kincumber and a video store in Avoca, on the NSW Central Coast.
However, he did not access it after 5.51pm and did not respond to Mr Pulver's message.
By 11pm, specialist bomb squad officers confirmed there were no explosives in the device, which was removed from Madeleine's neck around midnight.
"During that period of time, the victim was crying and scared for her life,'' the court documents state.
CCTV footage revealed that Peters' Range Rover was at both locations at the time the email account was accessed.
Further inquiries revealed he left on a flight to Los Angeles that continued on to Louisville, Kentucky, where his ex-wife lived.
On August 15, FBI federal agents arrested Peters at his ex-wife's home.
That same day, he admitted to being in Burrawong Avenue, where the Pulvers live, on the day of the offence, and creating a Dirk Straun email address.
He also admitted to purchasing various items found at the scene, but denied placing the hoax bomb around Madeleine's neck.
Peters also admitted he purchased a gun safe and had a friend drill holes in it so he could attach a bike chain to the safe.
But he claimed the safe, with the attached Dirk Straun email address and his bank account numbers, were stolen from his Copacabana address two weeks before the offence.
On September 14, he waived his right to an extradition hearing and agreed to be transported in custody back to Australia.
He arrived 10 days later and was driven directly to Surry Hills Police Centre, in Sydney's CBD, and charged over the incident.
- AP
