Did Sirius Black know he did not kill Peter? Did he or Peter kill all those Muggles?
Sirius saw him transform into his rat form. When everyone arrived to arrest Sirius I suspect the reason he was laughing was because he knew how well he’d just been framed, not only for all the muggles Pettigrew killed in escaping Sirius but also for James and Lily and the percieved murder of Pettigrew. We know of four illegal animagi in the Harry Potter books. One is Rita Skeeter, which is how Hermione got her to stop writing for a while (she stopped her kind of journalism and Hermione promised not to turn her in). The other three were James, Sirius, and Peter Pettigrew, all who became illegal animagi so they could spend time with Lupin during the full moon when he transformed into the wolf (werewolves are not animagi as they are not to be able to change form at will). The auror’s didn’t know about Sirius and Pettigrew, so there was no possible way for Sirius to tell them Pettigrew was still alive. But he knew Pettigrew was still alive and until he saw him as Scabber’s in the Daily Pro
