Can my friend take legal action for me spending his tax refund money, even though he gave it to me?

My grandmother did my friends taxes, and when everything was complete and ready to be sent, he let me know that he wanted to give all of his return money to me so that I could use it towards purchasing sound equipment. Well once I got the money I spent it on equipment that was needed. Now after it's been months since the moneys been spent, he claims that he never gave the money to me and he demands it back, there is no paper trail per-say since every agreement we had, was voiced. He even direct deposited his tax refund into my bank account for my convenience. Now he's threatening me legally, and I was wondering if he can actually press charges or anything of that matter?
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