A second man has been charged with murder over the death of army veteran David McArthur at Sanctuary Point on July 25.
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Homicide Squad detectives arrested a 41-year-old man at a Nowra home early Friday morning.
He was taken to Nowra Police Station and later charged with murder and will face Nowra Local Court this afternoon.
Homicide Squad Detective Chief Inspector Wayne Walpole said the investigation was ongoing.
"More arrests are expected to be made," he said.
However, he would not comment on how many more people were allegedly involved in Mr McArthur's death or the motivation for the killing.
"We can't go into specifics at this stage but we are confident of further arrests," he said.
Chief Inspector Walpole would not comment on what police allege was the motivation for the killing.
Mr McArthur was found by police in a cabin at the Palm Beach Caravan Park on Ethel Street around 8pm on July 25, with a single stab wound to the chest.
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Despite attempts at CPR, the 49-year-old could not be revived and died at the scene.
Following inquiries by Strike Force Frawley, including a public appeal for information by Homicide detectives and Mr McArthur's father Stuart, Nowra man Raymond Allen, 39 was arrested and charged at Silverwater Jail with a single count of murder on Wednesday (October 20).
Allen appeared briefly before Nowra Local Court that afternoon via audio visual link.
He did not apply for bail which was formally refused and he remains before the courts.
Following further inquiries police searched a Nowra home about 7.30am Friday and arrested the 41-year-old man.
During the search of the property, detectives seized a vehicle and clothing which will undergo further forensic examination.
Chief Inspector Walpole said police will allege the vehicle was "used to convey the people charged going to the murder scene."
Chief Inspector Walpole said at this stage a murder weapon had not been recovered.
"Our investigations are ongoing and we again urge anyone with information to come forward to police," Chief Inspector Walpole said.
"I thank the public for its assistance. The arrest was due to good, professional police work and information received from the public."
He said investigators had spoken to Mr McArthur's family, who were grateful for the progress so far of the investigation.
Anyone with any information is urged to contact police or Crime Stoppers on 1800 333 000 or https://nsw.crimestoppers.com.au.