'Human Skin' Teddy Bear Found Outside Store Provokes Panic, Revealed as Prank

Don't worry people ... Leatherface is not on the loose, but a creepy teddy bear that appeared to be stitched with human skin, was found outside a California convenience store in what's being dubbed a sick prank!

The San Bernardino County Sheriff’s Department rushed to a Victorville gas station Sunday -- about 2 hours north of L.A. -- after someone reported possible human remains ... cue the chaos. Cops taped off the lot, and a coroner investigator even showed up to inspect the item ... a teddy bear.

Turns out, despite the full-blown police probe, the bear’s not stitched from epidermis -- it’s made of latex, and selling on Etsy for $165 ... and the artist, Robert Kelly of Dark Seed Creations, is proudly owning his gory masterpiece.

The South Carolina-based artist told PEOPLE he shipped one of the bears to a Victorville customer just last week -- and wants full credit now that people are blowing up his phone over the creepy creation.