Someone Stole Heirloom Jewelry And Is Demanding $ To Return It

I have a friend who has been separated from his ex for quite some time, almost a year. They don’t live together and haven’t for a long time. She (the ex) never comes inside his place, however due to a power outage, her and their kids had to go stay over at his place for a night. That’s where she saw my earrings and stole them. The reason she did this is because of jealousy at first, but when she found out whose they were she really dug her heals in. She despises me because of my relationship with her ex (we’ve been very close for decades and even briefly dated a couple months ago).

I immediately noticed they were missing next time I was over and asked him about it. He confronted her and she admitted it. She even taunted me about me how I would never see them again and that she threw them away. However I kept pushing the issue. And guess what, turns out she still had them, apparently she really likes them. I told her (via fb messenger) that they were very important to me because they were the only thing my grandmother gave me before she died. And I plainly asked that she return them.

My friend said he would figure out how to get them back, and it was all good. But today I asked about them again and he revealed that she has demanded $400 to return the property she stole from me.

So now this is theft, and.. extortion? Isn’t that another crime? How do I go forward? Obviously paying her $400 is outrageous and infuriating. Not going to happen. All of this is just so wrong, how do I win in this ridiculous situation?