But before detectives could search her home near Venice Beach, a freewheeling boardwalk known for its mix of performers, tourist shops and seaside gym, someone who police would not identify handed in the necklace.
Police presented a potential case against the actress on Wednesday night, although prosecutors will not make an immediate decision on whether to pursue charges, district attorney's spokeswoman Sandi Gibbons said.
Officer Bruce Borihanh of Los Angeles police said the investigation into the Mean Girls star was for possible grand theft.
The allegations bring more problems for Lohan, 24, who is still on probation for a 2007 drink-driving case and is also being investigated for an alleged assault on a rehab worker in December.
Kamofie & Co, a Venice custom jewellery shop within walking distance of Lohan's home, reported the necklace stolen on January 22, about three weeks after the actress was released from three months of court-ordered rehabilitation at the Betty Ford Centre. The treatment, her fifth rehab session, came after she admitted failing a drug test shortly after being granted early release from another treatment programme.
Regardless of the decision by prosecutors in Los Angeles and Riverside County, where Betty Ford is located, Lohan is due back in court on February 25 for a probation hearing.
Jeff Kaman, the husband of store owner Sofia Kaman confirmed that the necklace involved in the Lohan case was from Kamofie, but declined to comment further.
According to the store's website Kamofie's jewellery has been featured in several celebrity magazines, including a photo of actress Amanda Seyfried in People magazine's "World's Most Beautiful" people issue last year.
Lohan's frequent legal troubles, including lawsuits, two rehab stints and two trips to jail in 2010 alone, have led to the actress appearing more in court than on the big screen in recent years. Her role as porn star Linda Lovelace in a biopic was recast while Lohan was being treated at Betty Ford
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