Ok so I need help telling this friend that I can't be friends w/him anymore. Is there a good way to tell him?

I thought I could trust him w/my wallet, since I was letting him hold it for awhile. Okay. So me, him and my friends were altogether visiting my dad in the hospital. I let him hold my wallet, while I was seeing my father w/friends & while he was smoking a cigarette outside. There was a 5 min. time diff going into the building. Well after I was done visiting my father & wanted to check my wallet. $20 was gone & I really needed it too. I asked him what he did w/the $20 when I originally had $40, but now I'm down to $20 along w/another $1 in it stolen too making it $21 stolen from it.

I asked him where it was, he said he didn't know what I was talking about. He didn't yell at me, he didn't raise his voice to me. He looked me in the eye & told me he didn't take it.

My friends had smokes, he was bumming smokes off of them, they kept on telling him no. He smokes a lot. He asked me to buy them for him, I said no. Then on top of that he is selling his "zanax" to get money. He has no job. He is looking for a job. & he smokes pot. I honestly think he sole more from me earlier before this. He said everything was his fault & trying to put me on a guilt trip when he stole my money.

I don't want friends like him around me that lie, and steal money to get their ways. I don't know a good way tell him that I can't hang out w/him anymore. Can someone tell me a nice way to tell him or to never pick up his phone calls? B/c I have had friends like him before & they were just as bad as him, if not worse & I had to move on from them.

Can someone help me on what to say? B/c I don't want friends like him around me.