My Apple Ipod Classic 30GB was stolen?

Well actualy is my daughters Apple Ipod Classic 30GB. This is what happened in February of 2011. My daughter asked her friend from School to sleepover, since we were going to move to a another house. It was my daughter (12yr old) last week at that School. Before we moved I kept asking my daughter for her Ipod and kept looking for it everywhere, but didn't find it. In June 27, 2011 she found out that her friend from the old School has it, because her friend show it to 2 of her classmates of the old school that are best friends with my daughter. Now I have the Serial Number and Receipt from the Apple Store. What can I do, any advise. I know the girl (12yr old) might have it. I have 2 people that saw her with it. Plus she has a rep that she almost stole her teacher's cell phone, and other stuff when she visit someone house. This I just found out 2 days ago. Should I tell her grandparents, or report it to the police? They can always denie it and she might just hide it or taken to another house. Since her mom lives in another town near by. Didn't want to give her time to hide it. I have the girls address, Ipod Serial Number. Should I call the police to see what they advise me to do? My question is what should I do? Please give me the best serious advise. Thanks