First, I agree with almost all of what you said. Never implicate yourself. Ever. Don't lie about it, don't tell the truth about it, don't say anything about it unless compelled to speak by a court (and even then, run every word by your lawyer first). However, before we go all tough-guy with "get a warrant"...
By admitting to copying someone else's code you could be confessing to a real crime that could result in time in prison.
Complete and utter bullshit. Plagiarism does not commit a crime, period. Academic violation, yes. Institutional violation, yes. Intellectual violation, yes. Probably a workplace violation in some cases (though typically only if you create content for your employer intended for public consumption). But criminal violation? No, no, no.
At most, the real author could sue for copyright violation - non-commercial, academic, non-distributed copyright violation. Good luck even finding a lawyer to waste time on that goldmine of a case.