The arrest of Mr Frankel in a room at the Hotel Prem brings to a close an international hunt that lasted four months. It spawned headlines around the world about one of the most serious, but also one of the most bizarre cases of financial fraud perpetrated on American soil.
It began on 5 May, when firefighters in Greenwich, Connecticut, were called to a mansion that turned out to be Mr Frankel's. They found only a smouldering filing cabinet and burning documents in a fireplace. Those papers that were not burned told investigators something extraordinary: Mr Frankel, a gangly and eccentric man, was apparently at the heart of an enormous securities swindle.
Mr Frankel, who had been running an unlicensed securities business from the mansion, is accused of stealing at least $218m (pounds 136m) from 11 regional insurance companies. The companies, which believed Mr Frankel was managing their money for them, put the sum at $915m. Additionally, $1.98bn is missing from the St Francis Assisi Foundation, an apparently phoney Catholic charity set up by Mr Frankel in the British Virgin Islands as a place to conceal his gains behind a facade of unimpeachable legitimacy. There were links between the charity and the Vatican.
An international arrest warrant was issued by the FBI in Connecticut in early July and hopes were high then that Mr Frankel would be caught quickly. Until this weekend, however, the FBI suffered nothing but frustration. They said that the arrest in Germany came only because of a tip received on Saturday. "We responded to various tips and a lot of them were fruitless," FBI Special Agent Michael Wolf said at a press conference on Saturday.
Just before fleeing, Mr Frankel bought $10m of diamonds. For a long period in the summer, he was reportedly in Italy, living in apartments and hotel rooms supplied by contacts in Rome. Recently, however, word had been leaking, even into the US press, that he was becoming desperate and resigned to his eventual capture. "When you're the object of that large a manhunt, I think you'd expect that you'd be apprehended," said Hugh Keefe, Mr Frankel's lawyer in Connecticut.
An American named Cynthia Allison, who was using the alias Susan Kelly, was found with Mr Frankel in the hotel room and was taken into custody for questioning.
In Greenwich, Mr Frankel had rented a second house near his own that authorities said was a dormitory for a retinue of women, some of whom have been described as girlfriends.
It was unclear yesterday whether Mr Frankel intended fighting extradition to the US. In any event, it is likely to be many months before he is brought back to Connecticut, where he will face charges of financial fraud that, if proven, could bring him more than 20 years in prison.