I usually try to beat around the bush with our son. That is, is someone in our family did horrible things, I don't tell him the truth. I just tell him that this person hurt someone and broke the law and because he did that, he have to go to jail for a long time. When our son tried to ask what it was, I told him the truth. I told him that it is embarrassing for me to talk about and make me sad when I think about it. And that I rather not talk about it with him but I'll tell him someday (and that someday is when he get older). I also told him that things are going to be better because he unable to break the law now that he is in jail and he may even learn from this experience.
I try not to lie to him as much as I can. I don't even do the Santa Claus lie either. But I do tell him about the history of Santa, what he is about, what he symbolize, and that in certain way, he is real but not like the storybook. He is real through parents. They are the ones who carry on the traditional of Santa Claus, and the magic is real as well -- Love is magical if you know what I mean.