He knows that federal charges can be pardoned, and he knows that he might be able to fight off (or at least reduce) any state charges. But he'll need a big pile of money to do that with any confidence. So he's doing this dance, dangling the possibility of his cooperation to try to get Trump himself, or anyone who cares about protecting Trump, to pony up some of his legal bills.

At the very least, he knows that his family won't be prosecuted, so if he can minimize his own liability to state charges, and be confident that the Trump Organization will see to it that his family stays comfortable while he's up the river, then that might be enough for him.

Or maybe I've been watching The Wire too much.