Hey, that really sucks and I’m sorry it’s happening to you. You sound very competent and like you take pride in your work.

Here’s my advice:

1. Don’t quit without another gig lined up.

2. Start looking for a new job now. A bad boss can ruin even a great job, and managers in particular are hard for a company to get rid of. She’ll likely be in that position awhile. You’ve got a boss who is incompetent and has already displayed some loose ethics. You don’t want to stick around that.

3. Incompetent bosses can sometimes be a good thing because they’re easy to fool. Consider pulling back on your work production so you can focus on designing a great resume and prepping for interviews.

And remember the most important rule: “A company will get rid of you just as soon as it’s convenient for them to do so. You should be ready to do the same to the company.”

Report the problem and if they don't believe you or are unwilling to act, leave. Either way, start looking for a new job right away in case things don't go your way.

Agree with RagnarokOnline.

Start looking. Sounds like bad management is embedded.

Don't jump without something else lined up.

And don't close any tasks for this idiot.

Document all you can. This kind of shit is highly unethical and likely illegal. If you have sufficient evidence, take it to the higher ups. If they don't care, bail.

I think if you can hook up with her, your problems will be solved.