Run away...

I agree with most, espacellly Jim Bremner, help him. But first of all, let see what you can afford to lose in case...

there's TAX bennies for doing this by the way...talk to your CPA

Trust, but verify.

Side note, wonder how many Corvette owners that take their car apart someday will wonder what went on when they find the build sheet for a car with a different VIN and that the car was a different color once upon a time.

The best way to guarantee that an ex-con will go back to their old bad habits is to have them get out and not be able to find honest work. Its very easy to go back to what they know makes money when frustration sets in. Giving your friend a job (not just money or a free ride) is a great way to pay him back for his kindness to you and actually help the community.
Having said that, you have to remember that respect is automatic but trust is earned. Has he repented or just sorry that he got caught? I know you said he was a "good guy" but let me ask you how much of a good guy was he to the guy who bought a stolen car and lost everything when the Police found out?
Like others have said, have a detailed understanding about the time-line, no keys, etc. Make sure you work closely with his PO.

Yes, you should try to help him, and yes, you'll regret it.
He'll end up screwing you over I guaranty it.

But you should still try, at least for a little while. Make sure you're ready to pull the plug on a minute's notice tho, you don't want him to drag you down.

I know a guy who did a couple of years in prison as well, when he got out I helped him and I don't think I ever saw someone who worked so hard because he felt he had wasted a couple of years of his life in prison and had to get his life back. He worked very, very hard to make up for it and to put himself in a position where he'd never have to revert to the dark side ever again. He's pretty successful now and has not been arrested since he got out in 1975, not any kind of trouble at all, none.