The practical question of how long you should continue to be the power of attorney is something really between you and your friend. There is no legal requirement for you to continue to be your friend's power of attorney or not. More to the point, even if you are your friend's power of attorney, you are not required to use the power of attorney regardless of your friend's situation under I.C. 30-5-6-1.
However, if you choose to not act that may obviously be detrimental to your friend. If you do not want to be your friend's power of attorney any more, you should let your friend know as soon as possible so they can get someone else to take care of things using a new power of attorney before they go off to jail. Best of luck to you and your friend.
While I appreciate the opportunity to answer your question, my thoughts and impressions of your case may change given more information. Typically, I would give advice following a face-to-face meeting where we could both ask questions of each other about your situation. Therefore, my answer is intended to be general guidance and not legal advise for you to rely on in your particular situation. Moreover, my response to you is not intended to establish an attorney-client relationship. If you would like to hire me as an attorney, you must contact my office and we must enter into an agreement for me to represent you.