Police believe that a missing Cape Breton man was killed in a violent confrontation that included gunfire on the water, CBC News has learned.

Sources tell CBC that RCMP investigators seized a gun during a search of 65-year-old James Joseph Landry's home last week.

Landry is one of three crew members from the lobster boat Twin Maggies charged with second degree murder in 43-year-old Phillip Boudreau's death.

The case police have put together draws a disturbing picture of an out-of-control fight over lobster fishing territory that ended in gunfire and death.

Police officers told CBC News last week that they believed Boudreau was involved in an altercation with men on a larger boat.

Last week, Boudreau’s niece Tara Lynn Boudreau, admitted that her uncle sometimes poached lobsters from other fishermen’s traps and that may have been what caused the altercation that is alleged to have led to his death.

Now, sources tell CBC News that investigators in the case believe that Boudreau had been cutting traps set by the Twin Maggies’ crew when the larger vessel arrived on the scene the day of Boudreau’s disappearance.

People in Petit-de-Grat say there was tension over where those traps were set in the water and whose fishing territory it was.

Moments after the Twin Maggies was seen from shore, witnesses reported hearing as many as five gunshots coming from the water.

A short time later, Phillip Boudreau's overturned motorboat was recovered near the entrance of Petit-de-Grat harbour.

His body has not been found.

Police found evidence his boat had been rammed by a bigger boat. Sources tell CBC News that investigators also found evidence of gunshot holes in the hull of Boudreau’s overturned boat.

They are now running ballistics tests on that evidence and comparing it to the gun seized during the search of Landry's property, sources say.

All three suspects in the case — 65-year-old Landry, Craig Landry, 40, and Dwayne Matthew Samson, 43 — remain in jail and are due back in court on June 24.

Divers are expected to resume the search for Boudreau's body Thursday.