Since your roommate never signed a written lease for the unit that you have written about but placed a security deposit down for it, under the laws of all states in this country you were required to immediately return this security deposit to the person who placed it. The reason is that there is no reason for you to hold it since this person never signed a lease for the unit which would have required a security deposit for it.The rention of the security deposit could be deemed as being in bad faith.