That sounds like a HIGHLY unusual lease arrangement, and it sounds like there is a LOT more going on than what you have posted--and I recommend against posting more because this is a publicly available forum.
If the police have really already been there, then I'm not sure what else you can do about the spy cams/mics/wifi tap, or the trespass by the landlord. If the cams are inside your unit, then why not just take pictures of them?
A criminal record does not preclude a person from being a landlord, so by itself, the criminal record is not relevant.
If you are concerned for your physical safety or privacy, then don't move in.
If you want your $5000 back, then you can potentially file a lawsuit against the landlord for potential violations of contract or violations of the landlord tenant act.
Previous poster gave you very, very good advice. You do not have to prove beyond a reasonable doubt the existence of the cams/mics in your unit to get out of a lease. If there is no "meeting of the minds" then don't move in. The reason the cops can't help you is that there is no crime here, on these facts. But you don't need to prove a crime was committed to get out of a lease. Just write him and say, "I don't want to move in, I don't want to live here and I want my money back now."
And unfortunately you have discovered why it is such a bad idea to pre-pay rent. Luckily, you can sue him in small claims to recover your money. Elizabeth Powell
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A landlord's criminal history is not a basis for breaching the lease. However, if you can prove that there are cams and he's spying on you, that is grounds for a suit based on constructive eviction and breach of quiet enjoyment.
The police don't need a warrant if you can find the cams and turn them over to the police yourself.