Homicide detectives have arrested a man and are expected to charge him with the murder of Khandalyce Pearce.
Daniel James Holdom, 41, was arrested at 8.30am on Tuesday and is currently being interviewed by detectives at Parramatta Police Station.
Police expect to charge him with the murder of Khandalyce in 2008. Her remains were found in a suitcase on the side of a highway in South Australia earlier this year.
He has already been charged with the alleged murder of her mother, Karlie Pearce-Stevenson. Her remains were found in Belanglo State Forest in 2008.
Police will allege Holdom killed Ms Pearce-Stevenson, 20, first in December 2008 before killing Khandalyce days later.
It was seven years before the toddler’s bones were found on the side of the Karoonda Highway at Wynarka in July.
Police only linked the two cases in October following a Crime Stoppers tip-off and a major DNA breakthrough.
The investigation has spanned four states, including the ACT, NSW, South Australia and the Northern Territory.
The mother and daughter left their life and family in Alice Springs between 2006 and 2008 to travel Australia.
Police say a large scale fraud was carried out in the young mother’s and daughter’s names after their deaths.
Their identity documents wee hijacked and more than $90,000 was funnelled through Ms Pearce-Stevenson’s bank account.
Police allege people with knowledge of her death used her mobile phone to provide a false proof of life to Ms Pearce-Stevenson’s family.
It was also used to ask Ms Pearce-Stevenson’s mother, who died from cancer in 2012, for money.
Holdom’s ex-girlfriend, Hazel Passmore, has been questioned at length by South Australian detectives over the alleged fraud.
She was left in a wheelchair in 2008 after Holdom crashed the car they were in, killing two of her children.
No charges have been laid in relation to the fraud.
The arrests come four days after Ms Pearce-Stevenson and Khandalyce were farewelled at a funeral in Alice Springs.