This guy is a bully, plain and simple. The fact that you liked him is an unfortunate added layer in the situation, but it doesn't change the fact that he's a bully.
Dealing with him isn't going to be easy. If you tried to talk to him about it, he might laugh in your face. And it's certainly illegal to hire someone to beat him up. Your best bet, as sad as it sounds, is to just ignore him. Live your life and live it well. Celebrate the fact that you have friends and a good heart and he's an idiot with horrendous social skills.
Bullies are weak, small people. They lash out because their home life is terrible, their minds are weak or their self esteem is in the toilet. It rarely gets better for them, and as the years go on, their smallness increasingly becomes their defining trait. So just be patient, and let nature take its course.
I know it's not as exciting an answer as "go slash his tires," but rest assured that fate catches up with jerks.