[nkurz]

I'd love to have an update in a few years. Do things end up better for having let him off, or does he cause even more damage?

I think it's unlikely that the author was the only person threatened, and also unlikely that a "talking to" will prevent others from being victims as well. While I'd like to think that people can make a full turn around from evil to good, in this case I'd bet against it. If things are as described, the kid is not a wayward youth but a psychopath.

Certainly from the child's perspective it's better not to involve the authorities. But my greater concern is for the rest of society. No, there is nothing magic the authorities can do that will help this individual, but unlike a counsellor they might be able to restrict his ability to further harm others.