It's happened before.
Your wireless isn't secure...and so a neighbor or another individual "borrows" your wireless signal and engages in illegal activities while online. The problem with this scenario is that the signal originated in YOUR home from YOUR router...so YOU are the guilty one as far as the police or FBI are concerned.
That's a hard one to defend. You're better to protect yourself ahead of time to prevent such an event from happening. It is VITAL to ensure that your wireless connection is secure. Yes, that security CAN be hacked...and rather easily. However, someone isn't going to bother hacking you when there are 4 other people in your neighborhood who don't have to be hacked because their wireless signals are open. Don't be one of those 4. Be the one who is passed by.
How? You can easily ensure that your signal is secure.
Most wireless routers have a "default" address. That is "192.168.1.1" (without the quotes). If that doesn't work, then you can find your individual ip by going to Check Your IP. The number that pops up in the top, left-hand corner is your ip address. Enter that into the address field to access your router.
Once in this window, you can click on “wi-fi protected set-up” to ensure that your security protections are enabled. On mine, there are two different settings that should be enabled to ensure that we are fully protected.
The bottom line...make sure you're protected!