Lindsay Lohan Facing Grand Theft Felony Charges, Report Says

Feb. 6, 2011— -- Lindsay Lohan's career comeback may face another legal setback this week, as Los Angeles County prosecutors reportedly will charge the actress with a felony in connection with a $2,500 necklace that disappeared from a Venice, Calif., boutique last month.

According to the report on TMZ, Shawn Chapman Holley, Lohan's attorney, has been informed of the looming charge, which could come as early as Monday.

"We vehemently deny these allegations and, if charges are filed, we will fight them in court, not in the press," Holley said in an email to ABC News.

The Los Angeles County District Attorney's office disputes the report.

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

"The LAPD got a search warrant to search her house, and then, and only then, did she decide, boy I better do something and she had an assistant beeline it for the LAPD and return it," said TMZ's Harvey Levin.

Late Tuesday, the Los Angeles Police Department began investigating Lohan in connection with the possible theft. As part of the investigation, LAPD detectives obtained a warrant to search Lohan's Venice residence, where she's been living since she left the Betty Ford Clinic in January.

Law enforcement sources told the Los Angeles Times that surveillance video shows Lohan wearing the necklace, which disappeared after she visited the store on Jan. 22.

After detectives started looking into the case and began preparing search warrant, a friend of Lohan's brought the necklace to the Pacific Division police station.

It's not the first time the 24-year-old starlet has been connected with missing gems.

In 2009, British police investigated the disappearance of $400,000 worth of Dior jewels from a photo shoot Lohan did with Britain's Elle magazine. At the time, Elle released a statement exonerating Lohan, saying, "Elle has no reason to believe that Lindsay Lohan was in any way responsible."