Yes, the last wallpaper used is stored as part of your backup on Google's servers. This guy would have had to take his picture and make it the wallpaper while still signed into the phone as you. Not very bright. You won't find the picture on the phone though, and as soon as you change the wallpaper the old picture is history. Should take a picture of the phone's wallpaper and give it to the police. Change the Google password.