we lived together six years ago, now he wants money back, advice please!

[nomadchick]

I'm in Tennessee, but we lived together in PA, TN and California, most recently in California.

I was 19 when I met him, he was 25. We moved in when I was 20. At that point he said he wanted me to learn how to save for retirement - he was REALLY into investing, and this was back when day trading was so popular (1997), in the mid-90's. I was a student with no money, though I was paying my own rent, etc., and we always split expenses. He opened an account for me, put $2000 in it, and told me it was a gift so that I could learn how to invest and see how compound interest could work for me. I specifically said that I didn't want to be in debt to him because even at the time I wasn't sure we were going to stay together - I mean, come on, I was 20 and still in school. He said not to worry, that he had the cash and wanted to share it. He didn't give many gifts at Christmas, etc., but he did want to give me that. So ok, I accept it.

Fast forward several years, and I'm living in England. We've split up but were still on friendly terms. He wired me about $500 because I was broke. This was in 2000.

Fast forward to early 2002 - I've moved back to the US and he wants to get together. I panic because I don't want him thinking I want a relationship again, and I tell him that I'm engaged. Stupid, I know, but I thought that would show him that I was done with the relationship.

He wanted his money back, and he called my PARENTS threatening my dad, saying things like "I'm smart and angry, and you don't want to be around when those two qualities are combined..."

I told him no, to stop threatening my family, and to communicate with me only through his lawyer from then on. I didn't hear from him again.

Fast forward again to mid 2003 and I called him just to clear things up - I was driving through his home town, thinking about how it stunk that it ended that way, and I don't like having bad relationships, and I thought we could talk. He didn't want to speak, so it drops again and as far as I'm concerned it really truly is finished now. I figure I made my overture, and that's that.

Fast forward to now. I'm in a relationship with someone I adore, life is good, and I'm much more settled. He emailed me last week saying he wanted for me to "settle my karma" which I assume means pay him back. He wanted to talk on the phone, I said I'd prefer to keep it to email, and I offered him the $500 he sent when I was in England in return for him signing a document saying he would not contact me about this again. He hasn't responded yet. That was Monday. I sent him another email today saying he had until 5pm to respond or the offer would be withdrawn.

I think I'm being more than fair to him - the $2000 was a gift he gave me, and I can understand that he's emotionally upset, but this many years on you've just got to learn to let it go! He's lost far more than that during his day trading days. And I won't even go INTO the stuff I put up with while we were in the relationship. I always paid my own way, even though I was a student and he had money. This was the only big gift he ever gave me, and I really don't think I should have to give it back to him after eight years!

Is there a statute of limitations for this sort of thing?
Does he really have a right to this?
Was my $500 offer fair?
What should I do?

Thanks in advance for any advice...