Welcome to YT
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Yes, she could very well do exactly what you're suspecting. In fact, she probably is doing exactly that. You could try contacting her and say you want your puppy back, not yet revealing what you know perhaps - and see what the reaction is.
As far as forging paperwork - are you bringing that up bc your puppy wasn't AKC registered, so she'd have to fake that...? If she does do that, then you may have some recourse w/ the AKC - but I imagine it'd be hard to prove.