Yes, Police is correct

http://www.modbee.com/news/local/crime/article3156103.html

“The law says the person who owns that property has to reimburse the pawn (or secondhand) shop with how much they are out,” said Modesto police Sgt. Rigo Dealba, who works in the property-crimes unit. “If the shop buys a guitar for $50 and puts $50 into it to get it to a certain condition, the owner has to pay $100.”

See California Pawnbroker regulation

http://law.justia.com/codes/california/2009/fin/21200-21209.html

See case history, "In this case, we conclude that pawnbrokers have a right to procedural due process before a court can order that stolen property in their possession and subject to a 90-day hold under Business and Professions Code section 21647, be returned to the purported owners of the property. " https://scholar.google.com/scholar_case?case=4081938134777680282&hl=en&as_sdt=6&as_vis=1&oi=scholarr

That is to say, there are two ways to get your stuff back

(1) pay for whatever pawn shop spend on it.

(2) sue in court to prove that pawn shop knowingly received stolen goods, if you win, you get your stuff back for free.