Thanks bloom3 - yes I'll try not to tarnish my daughter with my own lack of trust issues. I have advised her that she shouldn't take anything of value to school because unfortunately things can get stolen.

To update this issue - this worsens over the holidays to where the girl told her father to call our house. My husband and her father had a calm conversation and it back fired for the girl. The father looked at her Facebook and found she posted a very revealing photo of her wearing a dress with extreme cleavage. She also had another photo of her wearing the 'hijab' which is a scarf and they're muslim - she captioned the photo 'terrorist'. So her Facebook account was gone for about 2 weeks.

The girl continues to speak about the situation even though the dad's agreed to get the girls not to talk about it anymore. She also has Formspring and annonymous posters keep bringing this up and she's saying hateful things. This is continuing to be a daily problem and I'm getting very stressed by the whole thing.