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What does your agreement with him/them state?
If this is not disclosed or if there is no contract then you have the federal courts on your side. In 2004, on a mainstream project we had this happen. The developer used this "feature" to demand additional payment.
Our attorney went to the federal court and asked for an emergency hearing which was granted. He was found to be in violation of numerous federal codes. The judge additionally considered this to be a potential extortion scheme and a cyber terrorism threat. I accompanied the federal marshals to his place of business and his home ( on the same day as the hearing). He was arrested and everything he owned that could have potentially been used to create or store code was confiscated. I mean everything down to Zip drives ( remember those? )
Ultimately he was forced by the federal courts to provide us a clean copy of the code and pay for an independent examination of the code to ensure there were no other instances of this or any other back doors or nefarious code.
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