When an iPod has been wiped internally and restored to the factory settings, it is virtually impossible to tell if it is stolen. Externally, the serial number might be rubbed off the back to prevent identification. Even that is not a surefire way to know, because the backside of an iPod is made of a shiny metal that scratches very easily. A red flag should go up only under certain conditions.
Examine the Source
If someone on the street tries to sell you an iPod, and there is someone else's information on it, it just might be stolen. Even if they show you a receipt, it still could be a stolen item, because thieves can be very resourceful. Another red flag is when someone is willing to sell the iPod for an extremely low price. This could be due to the fact that they want to hurry and get rid of a "hot" item.
The first time you turn on an iPod, it should show only the original apps and icons. On most iPods, this includes a calendar, calculator, clock and a few other basic apps. If you see anything extra, it came from the previous owner. There also shouldn't be any accounts logged in, such as instant messengers or emails.
Mobile Me is available on the iPod Touch 4th generation and is used with the Find My IPod application from Apple. If the iPod is stolen and the previous owner knows how to use it, it'll beep and flash the message, "Find My IPod Alert, Press OK to Dismiss." This is the default message, but the owner can type anything in the alert, including a number and address to return the iPod.
There is an iTrack Lost and Found Registry where the rightful owner may have registered the device. If so, the start-up screen displays the iTrack website and tells you exactly how to locate the owner. If the iPod has been registered, the owner can find you through GPS tracking, even if you do not try to find them. Go to iTrackmobile.som, and click "Search Registry." Enter the Serial Number into the box to see if it was lost or stolen.