If you've ever watched an episode of COPS or similar police show, you know there's certain phrases and actions that will hold up in court, others that won't. Also, law enforcement is not allowed to actually partake in the actions as they were at one time. Example: If you're going to bust a hooker, you can't sleep with her after paying (that's a crime), you just need her to make it clear she will have sex for money.
In Delorean's case, he was having hard times and got lured into a drug deal - not by drug dealers, but by actual govt agents. He actually won his case and had the charges dropped since he was caught in entrapment. His family was supposedly threatened as well if he didn't go along with it.
edit: bah! I'm no lawyer, but this explains it better: