If he tells the police that you stole it (and that he never gave it to you) and he is sufficiently believable, you could be arrested or charged--it depends on whether the authorities believe him. (And also on whether they give you the chance to tell your side of the story before arresting or charging.) That doesn't mean you'd necessarily ultimately be convicted, since if you have witnesses and evidence of your own, it may be impossible to prove "beyond a reasonable doubt" that you stole the ring--but the threshold for an arrest or charges is lower than the threshold for conviction, so you could potentially face arrest or charges and then have to respond to them. What you can do is either accept the risk of legal action if the ring, for monetary or sentimental reasons, means enough to you to take that risk; or consider giving it back, while sending him a letter (sent some way you can prove delivery) denying that you stole it but stating that you are returning it to keep peace in the family, if the ring is not worth fighting about.