Reading the magstripe on a credit card is trivial. Writing it onto a new card would require a lot more skills and hardware. For example, this magstripe writer could be used (in principle) to create a new card, which would work with a regular magstripe reader and probably fool your neighboorhood restaurant or maybe even the Apple store.
What's more interesting, however, is whether or not it would work in an ATM. I am unaware if an ATM has features that prevent fraudulent cards from being used to withdraw cash. (Pure speculation, but I'll bet they do. Vending machines have lasers that detect whether or not you put in a quarter or a stainless steel slug. ATM machines have to be at least this sophisticated).
It strikes me, however, that if the suspect in your case is this talented, they would be using their "talents" in ... more creative ... ways.
In this case, I would vote for Occum's razor: the suspect probably did not clone a credit card. They probably stole it, used it, and put it back. When they used it, they probably went on a shopping spree, and one of the places they went to buy stuff from was not legit and the card number was compromised.
Depending on how long the card was in their possession, trips to the ATM are entirely feasible. Contact your local authorities, and have them pull up the security footage of who made the withdrawal. I'm confident that you'll recognize them.
As far as the pin goes... I'll bet it's your neighbor's birthday, their house number or something else guessable...