A MAN is in police custody for the alleged murder of 20-year-old mother Karlie Pearce-Stevenson.

After extensive investigations, detectives arrested a 41-year-old man at Cessnock police station, in the NSW Hunter Valley, about 4.15pm Wednesday.

He is expected to be charged with Ms Pearce-Stevenson’s murder later tonight.

Inquiries are continuing into the murder of her daughter Khandalyce Pearce, who is believed to have been aged about two when she was killed.

Ms Pearce-Stevenson’s body was discovered in the Belanglo State Forest in NSW in 2010 and Khandalyce’s remains were found near a suitcase beside a South Australian highway five years later.

It is believed the mother and daughter were killed in December 2008 but at different times and in different locations.

It was revealed earlier this week that Ms 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.

Her bank account was used for years after her death and almost $100,000 was spent or withdrawn from it between November 2008 and March 2012.

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

A woman impersonated the young mother at a Centrelink interview in Adelaide in 2010.

NSW Police State Crime Command’s Homicide Squad established Strike Force Malaya and South Australia Police’s Major Crime established Task Force Malee to investigate the two murders.

Police urge anyone with information in relation to this incident to phone Crime Stoppers on 1800 333 000 or use the Crime Stoppers online reporting page. Information provided will be treated in the strictest of confidence.

media_camera This map shows distance between where the bodies of Karlie Pearce-Stevenson and Khandalyce Pearce were discovered.

— With AAP

Originally published as Man arrested over Karlie’s murder