Sounds like your buddy really boned you. You could be on the list to get an investigation letter...file the NASA form immediately, Write a novel covering ALL the details, and send it certified mail return receipt.

You can send as many NASA forms as you like. If one of them is actually used to get you off the hook, then you cannot use the silver bullet again for three years I believe. Also be advised that the NASA form will not protect from a deliberate violation...sounds like your buddies action was pretty deliberate, but you might be able to save yourself (if you didn't realize what he was doing at that moment). Also the FAA can still investigate AND violate you, but the actual punishment would be suspended. Unfortunately you still have the bust on record for the airlines to read about.

Who was PIC? If the other guy was your intructor and you do not have an instrument rating then it's all his fault anyway. It sounds to me like that guy had something to hide...was the aircraft maintenance, paperwork, or IFR currency out of date?

If you told ATC that you returned due to engine problems, you also need to look at NTSB 830...you may be required to file an NTSB report also.

For future reference the best thing to do (sounds like you were VMC) would have been to tell ATC that you needed to return and cancelled IFR. Then switch to tower and declare an emergency or not, depending.