TB Investigates

Melrose Business Owner Accused By ALS Victim’s Widow Of Not Paying Money From Fundraiser, Dozens Of Other Victims Come Forward Alleging Fraud


If Katie Murphy would like to come on the Live Show this weekend and discuss the allegations against her she reach me at [email protected]. We will be discussing it either way so tune in at 9 PM Saturday night and click here to subscribe to our YouTube channel.

This is Kaitlyn (Katie) Murphy from Medford.

She is the owner of Madison Ave, a “high end” fashion consignment shop in downtown Melrose.  She’s been praised for being the youngest female business owner in Melrose, since buying the business from her aunt in 2017.

Basically her shop sells other people’s designer products after either buying them directly for a discounted price, or by keeping them in the store until they are sold and then writing the vendor a check.


She was interviewed last year about her business, and according to Katie (at the 13:40 mark) “when you have the best stuff in town they all want it one way or the other. ”

This was in reference to a robbery in June of 2020, the second time that happened in 2 years.

A lot of people thought this was suspicious because the store is in highly trafficked downtown Melrose, and is a stone’s throw away from the police station. She didn’t have an alarm and there were no cameras, despite the fact that the store kept other people’s bags worth thousands of dollars in the storefront window.

Katie Murphy seems to believe that she has a target on her back because she’s some sort of big deal. It’s not easy finding people selling second hand designer clothing and handbags, so naturally everyone wants to be her. She used the alleged robberies as a way to promote her resilience, and had a videographer film her grand reopening, complete with champagne, oversized scissors cutting ribbons, cocktail dresses, and men in sports coats who greet women by kissing them on the cheek.


In 2019 Katie Murphy decided to hold an unsolicited fundraiser for a man named Luther “Lou” Halwadjian, a loving partner and father to a young boy who did repairs on merchandise for Katie’s business and was suffering from ALS. Katie solicited donations to her Venmo account, but also took cash donations, items to be raffled off, and items to be sold in her store. According to the promotion for the event, 100% of the profits were to go to Lou’s family. It was a huge success.


A big reason the event was so successful is because it took place on September 8, 2019 – the day of the Melrose’s Victorian Fair. The Chamber of Commerce’s annual event always draws a huge crowd to downtown Melrose, and effectively acted as free advertising for Madison Ave.

Lou lost his battle with ALS two months later and left behind his beautiful family.


But according to recent statements made by Lou’s widow Jessica at a Melrose City Council meeting in regards to Madison Ave’s business licensing, Katie Murphy stole a substantial amount of the money she collected that day. She begins speaking at the 46:30 mark, and her statement is clipped below.

According to her allegations:

  • Katie took donated shoes from a man named Jim and told him they would look good in the consignment shop, worth $1,040, but never sold them
  • Luther’s sister reached out and asked for the money after the event and Katie said she couldn’t pay yet for “tax purposes” due to the most recent “robbery” at the store
  • The event raised over $8K in Venmo and $3K in cash that Katie didn’t receive
  • She had statements from family who donated cash equaling $5,735
  • The store had a suggested donation of $1, but according to her friend Lindsey (who spoke right after Jessica did), most paid $20 to $100 in cash
  • Many people used cash to purchase raffle tickets, including $100 tickets for a Louis Vuitton bag
  • Katie claims that based on sworn statements from people who donated, she can prove that the event raised $18,765, and that that number does not include the missing Venmo transactions, cash
  • The estimated amount of total money raised from the event was between $25-30K
  • For months after the event Katie did not pay Luther’s family a dime, including the last 2 months of his life when the family could’ve used that money in his dying days
  • There was effectively no accounting for the money that was raised on that day since receipts weren’t written, and a large amount of cash was used for donations and tickets
  • The only people who won raffles were Katie’s friends and family, although a list that she leaked showed the names of several other people who never received any prizes
  • In December of 2019 Jessica went to the police, who told her that there were multiple complaints already against Katie
  • January 2020 Jessica contacted an attorney who was friends with Katie and tried to broker a settlement in which Katie begrudgingly wrote Jessica a check for $15,284, which she believed to be half the money raised
  • The City of Melrose allowed Katie Murphy to use the Chamber of Commerce’s event to victimize and steal from her family

At the 1:09:30 mark a woman also gave testimony, alleging that she gave Katie Murphy 4 prom dresses worth $2,200 (which they made her get dry cleaned first) to be sold in the store. When the woman asked if she needed a receipt they said, “no that’s not how we do it.” The woman did not hear from Katie for 8 months and did not check in due to a cancer diagnosis that kept her busy. When she finally went into the store to see what happened to the dresses Katie allegedly told her that the dresses were no longer hers, and that the woman owed Katie money for storage fees.

The woman also alleged that she raised her voice and accused Katie of stealing from her, at which point Katie told that “everything you’re saying is being recorded” on video. Yet she doesn’t have video of the alleged robberies that occurred at her store.

The Melrose Police Chief also testified that at least 5 people had made official complaints with the Melrose PD about alleged fraud committed by Katie Murphy. His replies suggested that he found the accusations to be credible and referred them to DA Marian Ryan’s office, who did nothing with them (Perhaps too busy looking into the completely made up lie about Mikayla Miller in Hopkinton).

At the 1:18 mark Katie’s attorney, who claimed to have a relationship with the Melrose Police Chief, said that Katie hadn’t stolen any money and accused the victims of starting a witch hunt with pitch forks, but never addressed any of the specific allegations against her. He claimed that the affidavits from witnesses were “hearsay, opinion, and belief,” and that because Katie hadn’t been charged with a crime it suggested she was not guilty.

He also said that “not everyone is a happy customer.” But the people testifying weren’t customers because they didn’t buy anything from her. They were people whose personal family tragedy was exploited by a stranger who doesn’t have any accounting of the money brought in on that day. They (Luther and his family) weren’t even aware the event was happening until they saw fliers for it.

He downplayed the emotional testimony from Lou’s widow by saying, “I’m not going to call them victims, that’s for crimes, they’re complainants.” But what else do you call a grieving widow who never received money from a fundraiser that was held in her spouse’s name?

A video of Jessica’s testimony on YouTube was sent to us by multiple people over the weekend, as was a link to an Instagram account called “victims of Madison Ave,” that contained dozens of similar complaints against Katie Murphy. I reached out to Jessica on Monday but she was scared of retaliation after anonymous accounts were created to harass her and her friend Lindsey with vicious attacks like this:

I don’t know who posted that, but I have common sense and my ratchet radar is pointing to one woman in particular.

After seeing these vicious posts and comments Jessica had the YouTube clipped pulled down, told me she had no comment, and asked me not to write this story. Apparently victimizing this woman wasn’t enough, she also had to be intimidated from telling her story.

Katie, if you’re going to try to scare someone, please come after me. I’m not scared of some bootleg Kardashian from Medford who figured out how to make fake profiles on Google, nor am I scared of your geriatric lawyer. I reached out to Katie for comment on Facebook but she immediately blocked me.

I get why Jessica was too scared to speak with me. Most people are not built to do what I do, and take the backlash that comes along with it. Instead she is counting on Attorney General Maura Healey to investigate.

Spoiler alert – Maura Healey’s not going to do anything. Maybe Healey would care if Jessica was a nonbinary illegal immigrant trying to play on the girl’s volleyball team, or she said she had information on one of the Trump kid’s offshore bank accounts. But as we saw with the dozens of victims of Eli Rego who she declined to help, Healey’s office is useless when it comes to consumer protection.

Consequently I had to do my own research for this story since I could not read any of the affidavits Jessica brought with her to the meeting. I found out that she currently has a tax lien against her business.

I also found out that her aunt Joanne Cotton, who Katie Murphy purchased the business off of in 2017, took her to Malden District Court and got a $20,134.92 judgement against her.

She had a $1,228.51 judgement against her in a small claims lawsuit filed by Action Emergency Management Services in 2019.

Katie also was taken to that Malden District Court by Capitol One Bank in 2017, had a $1K judgement against her when she didn’t show up to court, and then had a capias put out for her as deadbeats almost always do.

Although I don’t have access to the affidavits that Jessica had at the meeting, I was able to screenshot posts on the Victims of Madison Ave IG account before it was taken down, and the countless negative Google and Facebook reviews on Madison Ave’s Facebook page. There are also a plethora of complaints dating back years on Madison Ave’s BBB page. Many of these people came forward as a #MeToo thing after Jessica’s video went semi-viral, and almost all of them had similar complaints about not getting money owed to them, not getting messages returned, and being kicked out of the store when they demanded their money back. Many of these people suspected that the burglaries were fake and done for insurance, which she used as an excuse not to pay people. More than one person alleged that she was selling donated items to a woman in Lexington. Occasionally Katie would snap back and accuse the customer of lying.



Lou’s sister commented as well, and said she wasn’t choosing to pursue Katie Murphy because it’s not what her brother would’ve wanted.

This is exactly the kind of kindness and generosity that scammers prey on.

I don’t have all the affidavits or receipts, but I do know that this many people alleging similar things about Katie Murphy defrauding them is compelling evidence. All of the things they are saying, which were posted before these allegations were made, are consistent with the story that Luther’s widow told at that meeting.

Why would this woman hold a fundraiser for a man with ALS without consulting his family first? Why wouldn’t she have a full accounting of all the money that came through the store on that day? Why didn’t she immediately pay the family money that was owed before Luther died, instead of forcing Jessica to chase her down?

The City of Melrose is under no obligation to grant Katie Murphy a license to do business in town, regardless of whether or not she’s been charged with a crime. The Melrose Chamber of Commerce should immediately stop promoting this woman’s business and stop pretending that she’s some sort of symbol for girl power. And let’s hope an ADA in the Middlesex County DA’s office reads this and does something for the victims like ADA Alexander Zane did in Plymouth County after he read our blogs about Eli Rego.


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