Here's my answer (and what I'd do):
Ask them for the serial number as trevor said. If they do give it to you, give the phone to the cops. NOT TO THEM since they didn't act civilized people and actually know the whole story. If it's not the real serial numbers, keep it to yourself (until someone asks for it and proves it's theirs). However, if they keep bugging you even after they didn't prove it was theirs come up with an excuse. (You lost it, it broke, its real owner called and took it) etc..
And if they bring the shit up to your parents, tell them that it was your friend's phone and that your "friend" is lying.
That's what I'd personally do.
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I read all of them.. nice grammar. btw, it is better if you reported to the police.. as you said, you already put some app in HTC, you must clear them.. then give it to the police like it was happened just now.. good luck bro!