Man arrested over Karlie Pearce-Stevenson murder

A New South Wales man is in custody for allegedly killing Karlie Pearce-Stevenson, and is expected to be charged with her murder.

The arrest comes after police yesterday announced Pearce-Stevenson's identity, bank account and mobile phone were used for years after her death to mislead family and defraud social services.

Police said texts were also sent from Ms Pearce-Stevenson's mobile phone to family members, claiming the mother was alive and needed money.

"No more looking to see is that girl is you as we saw someone else in a crowd".

Police at the scene of where Ms Pearce-Stevenson’s remains were found in Belanglo State Forest in 2010

"On at least a couple of occasions" Des Bray said, "a female represented herself to be Karlie in communication with either family or friends".

Inquiries into the brutal murder of Pearce-Stevenson's two-year-old daughter continue.

"It's clear without doubt that a few of the people involved in the frauds knew without doubt that Karlie and Khandalyce were dead and continued with their role", says Det Supt Bray.

Police say a woman posed as Pearce-Stevenson during a 2010 bank, and again at Centrelink later that same year. Police believe the same woman also attended a compulsory interview with Centrelink in Salisbury in December that year.

Police at the scene of where Ms Pearce-Stevenson's remains were found in Belanglo State Forest in 2010.

The bones of Khandalyce were found in a suitcase with a Dora the Explorer T-shirt, blue teddy bear pyjamas, pink tracksuits and a patchwork quilt.

Both Khandalyce and Karlie were reported missing in the Northern Territory in 2009 but police said the report was later withdrawn.

The focus of the financial side of the murder investigation will be to determine how many of those people were involved in their deaths.

Det Supt Bray said there was no solid evidence to suggest a serial killer was responsible for the pair's deaths, however given the brutal nature of the crimes he it was something he would "keep in the back of your mind".