Nefario has always held onto most of the user funds so he could top up the hot wallet when necessary. Exactly what funds I should hold was never clearly-defined. I ended up holding all BitcoinGlobal cash on hand plus some of the user funds for when Nefario was away and the hot wallet needed to be refilled.

I assume he's spending user deposits. Maybe he's using his own money, but I don't think he has enough to cover lawyer fees. He said in the meeting that he wants BitcoinGlobal to pay for the lawyer.