The devastated owners fear the thief wasn’t acting alone and stalked them before he pounced in Docklands.
The Sharma family were celebrating a birthday about 8.30pm at Harbour Kitchen, when 10 minutes later they noticed Angel was no longer tied up outside.
The five-year-old dog had been waiting patiently outside when a man approached from behind and offered her the back of his hand, CCTV appears to show.
Then he grabs the Maltese Shih Tzu by the collar.
She nips his hand, before he manages to unclip her from her lead, and run off with the dog under his arm.
Earlier in the night, CCTV captured the man carrying a dog transport crate.
Footage later revealed the man had been watching the family with other men.
Owner Harshita Sharma said they scoured the city for the pooch until 1am.
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“It’s just disgusting behaviour – how can you grab someone’s family? It’s someone’s baby, it’s someone’s little child,” she said.
“I’m just scared he will do something to her, because she’s so scared, she’s so fragile,”
Constable Eliza Singleton from Victoria Police warned dog owners to keep their pets in sight.
“Unfortunately there are some people in this world… it’s just an easy money grab,” Cons Singleton, said.
“It’s a bit of a dog act.”
The man was wearing a bandana, ripped jeans and a black top.
The family and police are calling on anyone who recognise him to come forward.