You wrote, "I trusted an old friend and he did this to me. Who can I trust now?" Let me tell you that friends and money are a special case.
Good advice... Here's advice from a site I like Six Points of Advice If You're considering Loaning Money to a Friend.
The author concludes, "Remember, a friendship whose value you can express in monetary terms isn't really a friendship at all, so don't try to inject a financial relationship in there. Just don't do it." Check out the author's advice.
An observation... In many cases, when a "friend" asks us for a loan, we are the last stop in a long line of refusals.
And we best learn from the crowd in these things as taught to us in The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations.
The text teaches us that the aggregation of information in groups can result in decisions that are often better than could have been made by any single member of the group; well worth a read.
Tests of friendship... As in the observation above, indeed loaning money is not really a good test of friendship, for the needs that drove the request are rarely the last need.
To wit, people and even nations are overdosing on debt and many can understand that paying back these "friend" loans are low priority. However it is the extra behaviors of your "old friend" that warns that he has changed; those 'threats to you', promotes him to the unfriendly, unsafe category.
More, his "returning" the load to an unsecure mailbox is quite sophisticated and hints of more to come; the crowd rules here.
In sum...You wrote, "Someone tell me I'm making the right decision in just letting this go" and I join with others and tell you that in this special case, you are indeed making the right decision, in just letting this go.
I wish you good things.