It all began when a Venice, California jewelry store reported a missing necklace.

It was not your run-of-the-mill jewelry item but reportedly a one of a kind piece of bling, made with gold and semi-precious stones and valued at $2,500.

According to police, Lindsay Lohan was seen in a store video, wearing the necklace prior to it having been reported missing. Photos of the actress taken a week later showed her wearing a very similar looking necklace.

After police detectives obtained a warrant to search the troubled actress’s Venice home, the necklace was turned in to a police station by a Lohan associate.

According to TMZ’s sources, Lohan claims she does not fill out paperwork when she borrows expensive necklaces from jewelry stores, but instead leaves that task to her underlings.

Lohan reportedly told friends that she doesn’t “deal with things like that.”

She is currently still on probation in her ongoing DUI case and, according to TMZ, she is expected to be charged with felony grand theft. If convicted, Lindsay could spend years in prison.

However, the Los Angeles County District Attorney disputes the TMZ report.

“I don’t know where TMZ is getting their information,” Los Angeles County District Attorney spokeswoman, Sandi Gibbons, told the Beverly Hills Courier. “We have our investigation under review and a filing decision has not been made.”

Her case seems to turn on whether she merely “borrowed” the costly accessory or took it without consent.

The shop owner tells a decidedly different tale. Sofia Kaman, owner of Kamofie & Company, told TMZ that there is a step-by-step procedure that is followed for a loan of jewelry.

Kaman admitted that typically, rather than the celebrity, a stylist who works for the star “will come in and ask to borrow the jewelry for a shoot or an event.”

“When we loan out jewelry, we have a whole procedure that needs to be done,” Kaman said. “There needs to be insurance information given or credit card information in case something happens with the jewelry.”

Shawn Chapman Holley, Lindsay’s on-again, off-again attorney, has released a statement saying that the actress plans to fight any charges brought against her.

“We vehemently deny these allegations and, if charges are filed, we will fight them in court,” the statement read.

It’s not the first time Lindsay has been connected with missing jewels. In 2009, British police investigated the disappearance from an Elle magazine photo shoot of $400,000 worth of Dior gems. Elle later released a statement exonerating Lohan.

Lindsay is also currently under investigation for allegedly assaulting an employee at the Betty Ford Clinic, where she was recently receiving rehab treatment.

The legal clouds forming over Lohan’s head could spoil her plans for a comeback film role in a thinly veiled autobiography.