balls to the police. who cares if the current rider is not the thief? They most likely knew it was a stolen bike when they bought it off the dude in the street for negligible crack money. Do what's right, take the bike and teach the stolen bike buyer/thief a lesson.
edit. HEY! this is when its ok to STEAL to make a POINT.....who figured?
editx2: if you werent that concerned about reporting a stolen bike, why would they? I've never bothered. They never get em back...