I have been mulling this over since you posted it and agree with most of Diane B's advice. I agree that this should probably be reported to the police so at least there is some paper trail, etc, that is started.
Since the latest incident occurred at your house there is a huge liability issue!
The boy, whose head was shoved through the wall ... Please tell us that his parents were informed of the incident? Minor brain trauma or a minor concussion could have occurred and unless you are a trained in spotting this then ... Who is to say if he is truly okay.
The police should also report this to the school resource officer. If that kind of communication doesn't occur in your town then yes, l would have to agree that the school needs to be informed of this bullying behavior.
I am not as concerned about your son being manipulated into lying because he told you the truth when his friends weren't around. For anyone to go against the bully in front of a group of people, let alone a teenager in front of his friends is very difficult. (Most adults don't stand up to the bully at work, etc, because it can cause more damage then it can help.)
I disagree that your son is not going to be able to stop all communication with the bully BUT your son does need to learn how to distance himself from this boy and if they are grouped together for assignments at school then they can be dealt with on a case by case basis.
You do need to set some limits/rules with your son regarding this bully; e.g. not allowed at your house or on your property, your son cannot go to the bullies house, etc. Your son will be unable to avoid the bully completely because it would probably mean losing some of his other friends and not being able to participate in activities, etc. (Unreasonable demand). Your son is going to have to get a back bone about your house and property.
Also, this boy needs to be kept away from your younger son as much as possible, thus not allowing the bully in your home. You need to sit down with both of your boys and tell them, point blank, that they cannot lie to you and explain that this bully is manipulating everyone and why that is wrong, etc. Your boys might not be able to stand up in front of the group and call the bully out but they MUST know that they should always tell you the truth.
I agree with Diane B that your sons need to learn that they will be judged, now and forever, by the company they keep. I also agree that you shouldn't even try to deal with the bullies parents.
Also, 'the boys will be boys' thing is absolute B/S and a cop out for males across our country. There is no such thing ad 'boys will be boys' it is an excuse so that we don't expect men to grow up and live up to higher standards.
Kudos to your son for kicking everyone out. Make sure you tell your son how 'brave he was for drawing the line and making everyone leave.' (Your son is a good boy and did what needed to be done.)