You are the second owner of the iPod Touch. You registered it with Apple, but do you know the serial number?
This doesn't have to go to the police, and whether he claims you sold it to him is a proper alibi is about 5 steps beyond at this point.
If you knew your serial number before and verified that the kid's iPod is the same serial and indeed your iPod, you should have confronted him right then. Ideally you would have some documentation stating that you had registered this iPod, or at the minimum recorded the serial number on a piece of paper so you could pull it out right then and show them- "This is my iPod."
But if you didn't know your iPod serial number, then what you've found out has accomplished nothing so far.
The problem with recording his serial number, and then afterwards confirming that it matches your serial number, is that the kid can go, "Hey, that's not proof- you just came over to get my serial number, and then are now claiming it's yours." OTOH if you can print out some sort of documentation or something, then you can have that to show the date of your iPod registration.
If the iPod is stolen, you should be able to resolve it with either the kid or his parents. You show them the proof, and then you tell them, "I don't want to get the police involved, all I want is my iPod Touch back."
But you need your original serial number. All the other stuff about matching MAC addresses and iTunes Store logins is unnecessarily circuitous.
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He can claim that you sold, gave it to him and the police can't do jack. It's your word against his.
Actually, he already said he bought it from Walmart right? If he suddenly has to start changing stories, its going to certainly cast doubt on his word.