Keith Smith, 52, had told police that his wife, Jacquelyn, an engineer from Harford County, was trying to give money to a panhandler at a traffic light when she was robbed and fatally stabbed.
Baltimore Police Commissioner Michael Harrison announced first-degree murder charges Sunday against Keith Smith and his daughter, 28-year-old Valeria Smith, in connection with the killing of Jacquelyn Smith.
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Harrison said the pair was arrested in Harlingen, Texas, near the U.S.-Mexico border. He did not provide any information about a possible motive in the killing but said the two were preparing to leave the country.
The crime attracted national attention and prompted many people to regard panhandlers warily.
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"To now learn that family members staged this brutal killing is beyond belief and represents a double tragedy," Baltimore Mayor Catherine Pugh said in a statement. "They were responsible for taking Jacquelyn's life with unconscionable cruelty and contrived to do so in our city under the guise of random violence, exploiting the legitimate fears of our residents."
The Associated Press contributed to this report.