MOREHEAD CITY, N.C. (WNCT) -The State of North Carolina is accusing “A Perfect Fit for You” of defrauding it of more than $12 million through Medicaid claims without proper paperwork.

A Perfect Fit For You sign in Morehead City (WNCT)

The store’s owner, Margaret Gibson, is also accused by her former business partner, Shelley Bandy, of taking $7.8 million from the business for personal use.

The state filed a motion to intervene in the case through the State Attorney General’s Office on Jan. 31.

According to court documents in NC Business Court, “APF4U (A Perfect Fit for You) has received more than $12 million in payments from the North Carolina Medicaid Program for services and products it allegedly provided…. An audit commissioned by the receiver found APF4U doesn’t have the necessary documents to support its claims.”

Based on an audit, 72 of 90 claims evaluated had no documentation for items billed to the state. Court documents state Bandy was responsible for filing the claims.

Gibson’s attorney said in a statement,

Ms. Gibson did not oppose the State of North Carolina’s review of A Perfect Fit For You, and looks forward to them continuing the investigation that she had started prior to the filing of the lawsuit. Ms. Gibson is confident that the State’s work will bring the true facts to light. With regard to Shelley Bandy’s allegations, Margaret Gibson has denied each of the claims asserted against her and will vigorously defend herself against the allegations. She is confident that, through the litigation process, the allegations will be proven to be false.”

The case is currently on hold.