"Even though it's a pakeha taonga ... he will pay the penalty for taking it."
The family had been through a similar experience before and had witnessed the consequences of such behaviour, she said.
Ms McGrath issued a plea for the safe return of the medal.
"Please bring it back because it won't do you any good.
"Money is money, it might come into your hand but it will be gone in five minutes and [the medal] is something that remains forever. It was hard earned, it's not something that's just dished out here, there and everywhere."
Fearing for the safety of the heirloom, the family, who are based in Rotorua, entrusted the medal, along with a ceremonial sword, a carriage clock and several books, to Aratoi in 2003.
"There was a lot of home invasions going on and I was concerned - and I said if we go to town or whatever and we get raided, these things if they get taken can never be replaced."
The medal, which was presented to her great-grandfather by Queen Victoria at the Diamond Jubilee celebrations in England in 1897, was one of the few things the family had to remember him by, Ms McGrath said.
Her mother, Rongomaipapa Taikato, 96, was praying police would catch the thief.
"I'm sure they'll catch the guy whoever he is. It's a sad occurrence but I'm thinking positive about it."
Mrs Taikato, who grew up in Carterton, said she did not blame Aratoi.
"They tried their best. I'm not blaming them for what happened, that man cased the place, I'll bet."
Detective Sergeant Barry Bysouth said Masterton police executed a search warrant on a Masterton address last Thursday, but no evidence was found.
"We are working hard to recover the medal. We understand the importance and the significance that it holds for the family."
Police were pursuing other leads, Mr Bysouth said.
