In the end, it produced nothing more than another frustration for the authorities who have been seeking Karadzic since 1995 on charges of crimes against humanity and genocide committed by Bosnian Serb forces under his leadership during the 1992-1995 war.
Law enforcement authorities have told ABC News the international scramble began last week when an American, who had been in Bosnia during the war, reported seeing a man he thought was Karadzic in the lobby of a hotel in Panama City, Panama.
At the request of the Federal Bureau of Investigation (FBI) representative in Panama, the man was taken in for questioning by Panamanian authorities. The man reportedly told authorities he was an honest businessman from Serbia living in South Toronto, Canada with landed immigrant status.
But authorities suspected he might have had plastic surgery, and at one point Canadian authorities reported they were "95 percent certain it was Karadzic," based on a comparison with an old photo, ABC News said.
On February 19, authorities asked NATO troops to raid the homes of Karadzic's son and daughter in Bosnia-Herzegovina to obtain a toothbrush or other items that might provide DNA samples.
But this week law enforcement authorities told ABC News that police in Canada had concluded the man was not Karadzic.
The Chief Prosecutor of the International Criminal Tribunal for the former Yugoslavia (ICTY) in The Hague, Carla Del Ponte, said it was just the latest in a series of false alarms. She believes he continues to hide in Serbia.
"All the information we have with my tracking team and with intelligence services is that Karadzic is there and really I cannot find a reason why he would quit the region," Del Ponte told ABC News.
The United States has offered a USD 5 million reward for the capture of the Karadzic, but the prosecutor says she is concerned US diplomats are not doing all they can to pressure Serbia to find him.
"I would like to have more presence from the United States on this issue," she said.
A State Department spokesperson told ABC News that "the United States wants to see Radovan Karadzic, Ratko Mladic and all fugitive persons indicted for war crimes transferred to The Hague as soon as possible."