Scott O'Heir told police "This is bullshit, I'm being set up for murder" when homicide detectives arrested him a month after Singleton grandmother Hilliary Allen was found dead in her home, a jury heard yesterday.
Mr O'Heir, 28, and his girlfriend Cheyenne Anderson were lying on the floor reading when detectives found them in Oberon Library on April 8, 2009, Newcastle Supreme Court heard.
Before the officers told Mr O'Heir what he was being arrested for he said: "This is bullshit, I'm being set up for murder," Detective Sergeant Andrew Marks said.
Mr O'Heir told the officers he "knew this was coming" because he'd been reading newspaper articles about the investigation into Mrs Allen's death including descriptions that police released that matched Mr O'Heir and Ms Anderson.
"It was a set-up . . . It's all in the note," Mr O'Heir said.
A note was found in Mr O'Heir's pockets when he was searched in the library toilet, the jury heard.
The note contained details about a man called Derek attending Mr O'Heir's home on a Sunday morning.
The note described an argument between Mr O'Heir and Derek before Derek left and returned with a bag.
Mr O'Heir has pleaded not guilty to the robbery and murder of Mrs Allen on March 2, 2009.
He is expected to testify that his girlfriend, Ms Anderson, entered Mrs Allen's Boonal Street unit and confronted her before Mr O'Heir tried to help Mrs Allen. Mrs Allen died from blood loss as a result of a leg wound.
The jury was also played recorded telephone conversations and conversations recorded inside a caravan that Mr O'Heir and Ms Anderson stayed in at Oberon before their arrests.
Mr O'Heir's interview with detectives after his arrest was also played. The trial before acting Justice David Freeman continues.