SANDPOINT — The Bonner County Prosecutor’s Office has abruptly ceased prosecution of a woman accused of embezzling money from a company she co-founded.

Deputy Prosecutor Larry Goins and counsel for Virginia “Ginger” Katherine Petty jointly moved to dismiss the grand theft case against her because the matter is a civil dispute, not a crime.

Judge Barbara Buchanan granted the motion on Tuesday, according to court documents. The case was dismissed without prejudice, which means the state retains the option of re-filing it.

The dismissal comes more than four months after Buchanan found probable cause to charge Petty with the felony offense. A hearing to determine if there was sufficient evidence to try Petty was set for next month.

Petty, a former bookkeeper for GeoData Technologies, is accused of transferring company funds to make payments on loans taken out by Black Diamond Engineering, a civil engineering firm operated by her husband. Petty was further accused of shorting GeoData on a $50,000 bridge loan Black Diamond made to the company by nearly $18,000. GeoData, however, repaid Black Diamond $50,000 with interest.

Petty denied the allegations, according to her attorney, Nicolas Vieth.

As of Friday, no civil litigation had been filed in connection with the alleged dispute.