The 25-year-old kindergarten teacher's' body was found hidden under palm fronds at a sportsground in Lismore, in the NSW northern rivers region, in February 2005, six days after she was reported missing.
The surrounding area was a known crime-hotspot and had a history of sexual assaults on young women, the inquest into her death was told on Wednesday.
Tobias Moran was charged with Simone Strobel's murder but the case against him was dropped. (Bianca De Marchi/AAP PHOTOS)
Ms Strobel's then-boyfriend and travel companion Tobias Moran, who now lives in Western Australia, was charged with her murder in 2022. But prosecutors opted not to proceed and the case was dropped with $190,000 in compensation paid.
Mr Moran's lawyer Tim Game SC grilled lead investigator Detective Sergeant David Mackie over several aspects of the investigation, including the degree to which other suspects were considered.
"This is actually quite a dangerous place for a woman to go at this time of night," Mr Game said.
Counsel assisting Philip Strickland SC earlier told the inquest that on the night Ms Strobel went missing several people known to police were drinking in the area.
"There is no doubt that on the night of Simone's disappearance …. men with serious criminal backgrounds were lurking nearby," he said.
Detective Sergeant David Mackie agreed the initial investigation concentrated on Tobias Moran. (Bianca De Marchi/AAP PHOTOS)
At the time of her death, Ms Strobel had been touring the east coast of Australia with Mr Moran, his sister Katrin Suckfuell and another German, Jens Martin.
The group drank heavily in a nearby hotel on the night Ms Strobel disappeared and continued to consume alcohol and smoke cannabis after returning to their campground, the court was told previously.
The group told police Ms Strobel left their campsite after becoming annoyed with Mr Moran.
"All three of them said Simone left the caravan park and they never saw her again," Mr Strickland said.
Det Sgt Mackie agreed the initial investigation concentrated on Mr Moran and lies told by him, including downplaying a heated dispute with Ms Strobel, were given significant weight.
"Those lies, on your admission, heavily affected the course of the investigation," Mr Strickland said.
Det Sgt Mackie previously told the inquest in his opinion it was "probable" Mr Moran killed Ms Strobel and he believed Ms Suckfuell and Mr Martin helped dispose of her body.
After a $1 million reward was offered for information in 2020, an undercover officer going by the name of "Sophie" made contact with Mr Moran with an offer for an alibi, the court was told.
Simone Strobel's group told police she left the campsite after becoming annoyed with her boyfriend. (Jason O'BRIEN/AAP PHOTOS)
She told Mr Moran her brother had cancer and was given only two months to live and he wanted to confess to the murder for his family to get the reward money.
But Mr Moran told her the plan would not give peace to Ms Strobel's family and would leave those responsible still at large, the inquest was told.
"That wouldn't be any help to me," he said in the recorded conversation.
"It wouldn't solve the case."
Det Sgt Mackie said he believed Mr Moran "twigged very quickly" to the ruse.
"There's been a number of covert operations conducted," he said.
"It was fairly obvious from some of those recordings that Mr Moran was very aware that conversations were likely to be recorded."
The inquest will continue on Thursday.
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