This sounds like a difficult and frustrating problem.  However,when safety concerns are an issue for a child, a parent has the right, as well as the responsibility, to take whatever appropriate steps need to be taken to insure the child's well being and safety.  Since what you have tried does not appear to be working, here are some suggestions you might consider.  You may want to try one, some or all, of these ideas.
 
I am assuming that the bus stop you referred to is the stop for the school bus. If this is the case, you have legitimate reason for involving school personnel.  They also have a responsibility to care for the safety of all the children who ride the bus.  You might try having a conversation with the person(s) at your child's school who is/are in charge of busing.  They may be able to provide some assistance, or some advice, with the bus aspect of this situation.  
 
In addition, schools today are very aware of the social problem of bullying. Many schools districts have as part of their mission the goal of stamping out bullying.  Your child's school may have dealt with similar circumstances.  They may have some ideas for how to deal with this situation.
 
You mention that this man is terrorizing other kids too.  Have you thought about calling a parent meeting with the parents of the other kids? There may be strength in numbers and the more parents that are involved in addressing this problem, the greater chance there is that you may come up with solutions. Bullying is about power and control and about one person trying to take "authority over" someone else, and it usually easier for the bully if it is a one-to-one confrontation. An enraged bully can intimidate a 17 yr. old girl pretty easily for many reasons, not the least of which is the age difference.  No one, especially a youngster, needs to be exposed to that kind of abuse. Even the option of an adult trying to face down a bully alone is very tricky, as you have unfortunately found out. Usually bullies are not open to negotiation. I would encourage you to keep your teenage daughter, or any one for that matter, from trying to face this man alone, and trying to convince him to control his behavior.  
 
You mention that the cops have been no help. While not true everywhere or in all cases,  police are often unwilling to get involved in "domestic" situations.
And, if there is no "hands on" criminal act, often the police are actually powerless to help. However, some schools have a particular police officer assigned to the school itself, or one or more officers in the community who deal especially with student issues. You might try doing a little investigative research and find out (maybe through the school) if there is an officer in town who might be sympathetic and helpful. It probably is unrealistic to expect that an officer will face this guy and fight the battle. If it did happen, I would be surprised, but you never know what help you might get.  
 
Of course the option of a lawyer may be the one you decide to try. And if all else fails, it may be the best option if you can afford it.  Lawyers have dealt with intimidation before and may be able to make some suggestions for facing down the bullying in legal ways that take the power play away from the bullying individual.
 
Now, about your little girl, herself.  She is being intimidated and that can be damaging.  I would encourage you to let her teacher, guidance counselor, and other staff who are working with her know what is going on, even if they do not have a solution to the bullying itself.  It is important that everyone be alert to any signs of emotional distress for this child. What you can do as parent(s) is to reassure her that she is not at fault. While adults get this, kids often do not, especially if an adult is the bully.  You can reassure her that the adults are going to handle this, and you will keep her safe. Keep her off his street if possible. Does she need to be there? Let her play with whom and where it is safe. Until you figure out how to straighten out this problem, it may be better for her to stay and play closer to home.
 
Whatever you decide to do, your reassurance to your daughter that she is a good girl and not at fault, and that the adults will handle this, is very important for her emotional well being. Let's face it.  Bullies are not emotionally healthy individuals. You cannot change that fact, but you may be able to work toward setting limits on the bully. What you can do is act from strength; refrain from engaging at the bully's level, and do everything you can to make your child feel safe and cared for.
 
In a later post you report that CPS has been investigating; and at the same time you report some outside harassment, i.e. the fireworks and house banging. What I encourage you to do is to stay focused on your own self-care, and that of your children. You state firmly that your parenting is good. Keep doing what you know is best and right. You might want to keep a documentation of the harassing incidents to present to legal counsel, if you decide to retain it.
 
Now, here's an interesting, and maybe surprising idea.  Rather than see CPS as an adversary, I wonder if they might be included in a solution to the bullying  problem?  Often CPS and other similar agencies can offer services that can help.  People often take the presence of Child Services as an insult, but maybe they could be allies in a difficult situation. After all, their goal is the same as the parents'--keeping children from harm.
 
 
Bette J. Freedson, LICSW, LCSW, CGP