Isn't your BS meter beeping and lighting about now? Emancipated my foot! As far as you should be concerned, based on what this kid has told you, the kid IS NOT emancipated yet and it's not your responsibility to make sure he's safe off the street. It's his parent's deal until the court says otherwise. Call them to come pick him up, and if they won't take responsibility for their kid, call the police to report a runaway is hiding in your home.
I don't understand why you're letting this kid stay in your home. If you think he and your daughter haven't been doing things, you're really naive! Sounds like your kids have been doing alot of things under your nose and under the influence of this boy. Now they're trying to pull some stuff to see how far they can go before you put your foot down. Don't you have established house rules about guests? Curfew? Just because one child is technically an adult, doesn't mean he shouldn't have rules or curfew. It's your house, not theirs. For your own safety at the very least, you should not let strangers (if you don't know them they're strangers) come and crash in your home because your kids told them its okay. That should be your call.
Furthermore, if the kid were to get emanciapted, are you going to simply just let him squat in your home rent free so he can do your daughter under your nose, and encourage your son to throw his life away, eat you out of the house free of room and board, and basically destroy the order and peace in your home?
Do you know if loser is into drugs or other "activities?" Does he have a record? Access to weapons? A fly off the handle personality? What's wrong with you? You have what is basically a truant, squatter in your home.
What are you going to do if he challenges you or doesn't like what you have to say? If he doesn't respect the authority of his parents, he's not going to respect yours. In fact, he's already disrespectin.'
If you hadn't separated them and been keeping watch you have to know he was planning on having his way with your daughter. He's not your son's friend, he's your daughter's boyfriend. Unless you want to be a grandma and the parent of a third child, kick the kid out. If he doesn't like being at home there are places for troubled kids to go and live
Sadly, I think you let the vampire in and there may be no going back without a terrible fight on your hands. I don't think he's going to be out of your life or your kids' lives anytime soon. Get ready...and be resolved to have a spine and be tough. Hold your own. I predict in the very near future, your DAUGHTER, not your son is going to give you great grief about this one. Don't be surprised if she decides to "get emancipated" so she and the loser can go off together in the sunset. Clearly, there has been sneaking around going on. And it's going to continue.
If you don't want that inevitible headache, play hardball with the kid, because clearly he's up for a battle and isn't going to back down either to his parents or any other authority. If there is something he wants he's going to fight for it. He's a bad influence, get him out of your lives as fast as you can.