Learn Arabic (Modern Standard): هو ما سرق محفظتي أبدا.

In Arabic, ما is the standard way to make a past tense verb negative. Since سرق (stole) is in the past tense, we use ما right before it to mean 'did not steal'. You would use لا if you were negating a present tense verb.

Do we really need the pronoun هو (he) at the beginning of the sentence?

Not strictly! The past tense verb سرق already has 'he' built into it as the hidden subject. Adding هو at the beginning is optional, but it adds emphasis, giving the feeling of 'HE did not steal my wallet'.

How does the word محفظتي break down to mean 'my wallet'?

The base word for wallet is محفظة, which ends in the special feminine letter 'taa marbuta' (ة). When we attach the suffix for 'my' (ي) to the end, that rounded ة opens up into a regular flat ت so the letters can connect, giving us محفظتي.

What is the purpose of أبدا at the end of the sentence?

The word أبدا means 'never' or 'at all'. When you use it at the end of a negative sentence (like one starting with ما), it acts as a strong intensifier to show that the action absolutely did not happen.