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Police were called to the Footscray business just after 8pm on Friday to carry out a welfare check.
When they arrived, a 62-year-old woman from Footscray was found dead at a home operating as a Rainbow Garden 149 adult entertainment club.
She was allegedly killed in the early hours of last Wednesday morning.
Police spent Saturday searching the property and a car parked outside for evidence.
They arrested a 35-year-old man from Footscray at his home this afternoon, questioned him and charged him with murder.
The man is due to appear in Melbourne Magistrates Court tomorrow.
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