It sounds like you have a gut feeling that doing business with this individual will be nothing but problems. If your gut tells you to separate yourself and return the deposit, I would just say believe your gut feelings. They are usually right. JMHO
Lubricate the hole before tapping and the tap with good quality carnauba wax you should be good to go. I prefer to tap by hand rather than under power for wood especially, but also with inserts... JMPO.