Long story short as I don't want to talk too much about this.
Friend got caught with some shit I gave him and wants me to take a rap for him. I refuse. He gets pissed off and threatens to tell the po-po all about my DNM activity.
Currently have some BTC in a wallet that's enough for me to not want that frozen.
If my friend hypes up the story enough, will/can they get me for possible slip-ups during past orders or freeze BTC in wallets I own?
I presume the answer is no but I really want to be safe. Also, my laptop is encrypted but do they have the right to take it/try to access what's on it, as well as unencrypted email, etc.?
I guess my main question is; if my friend tells them about DNM activity, should I be worried or is his credibility shot?
Clean your house, don't have anything illegal in it. Nuke your computer with DBAN and install whatever flavor of linux you have always wanted to try on it. Make sure to enable full disk encryption during the installation process. If you have an android phone this would be a good time to try out CyanogenMod, don't bother backing up your phone before installing it, you want to have a fresh start. I don't know much about iphones but I'm sure you can think of a reasonable explanation for why you had to do a factory reset.
Don't bother trying to individually delete all of the traces you have left, stuff gets buried in obscure logfiles and backups and if you miss any of it you can be charged with destroying evidence. Once you are squeaky clean tell your former friend to go fuck himself. Consider your address burnt for all of time and try to have better choice of friends in the future.