The more realistic action would be along the lines of what MentorX and DG have said. The check is evidence. Do not cash it. If you do, you have accepted the "sale". It's an unwritten contract.
The cop didn't write a ticket, right? So everything that happened between you two is undocumented, except the check. So, it's going to be a "he said, she said" situation. You're going to need an adult authority figure on your side. I'm sorry, but it's a sad fact that in most cases public figures (like police, doctors, priests) are going to have an advantage in any public dispute.
There are a couple of options. The first would be to take that adult authority figure with you to the police station, talk to the desk sergeant, and find out who you need to talk to to clear up the "mistake". Do not make accusations at this stage, or you'll have them being defensive.
The other option would be to go to small claims court. I'm not sure if there is a Legal Aid office near by where you live, but they will sometimes offer advice or representation very inexpensively.
Remember to try initially to act like this was all a mistake in communication. This allows the cop to give the bike back without publicly admitting what he did was wrong.
What he did was SO wrong. But get the bike back first.
