Nefario: You shouldn't knowlingly take possession of stolen bitcoins.  Particularly when the owner of the service is so litigious and vindictive.

Misery: What was the nature of your agreement with CCM?  Do you have a written contract? It seems like you dont.

It sounds like CCM claims somewhere between 70% and 100% ownership of witcoin.  

It sounds like you have the only copy of the wallet in a full system backup.  You have been acting as sys admin, and may have a claim on up to 30% ownership.  You should renounce any claims of ownership, and argue you were working as a contractor for CCM.

This means he is solely liable for returning witcoin deposits.  

You can legally delete all backups. A backup of a key is not possession of bitcoins, it is access to them.  You are not destroying the value, you are destroying your access to the value. The bitcoins are legally property of the witcoin entitiy which you are no longer employed by.  You are not legally obligated to retain copies, seeing as how you are no longer employed by him, and he has not been paying you.  Witcoin (owned entirely by CCM) is entirely liable for returning these "stolen" bitcoins.  The fact that CCM does not has backups of his customers' deposits is just negligent business practices, and liability falls to him to pay them back.

Wash your hands of this and let him deal with it.  Don't let him threaten you.  He is trying to blame you for his own mistakes.