How to deal with someone trying to extort me?

Respected sir/madam, I have a question and I need your rightful guidance to proceed with the following matter, My friend's father is a Govt. Employee, he will be retiring soon in the month of August, there is a random person, 1. who is defaming and blackmailing (for the past 1 month) by sending letters to him, in order to defame him and 2. refrain him from the government facilities after the retirement, 3. He is saying he would send a letter to the Higher authorities regarding the verification and conduct of the employee during his services. 4. He is demanding a huge amount of money about 5lakhs in return for the closure of the matter. How to proceed with this current situation, what are the steps to be taken? We have no other way right now, and we want to resolve this issue with the help of efficient lawyers from your team. Kindly, help me with this and guide me through the process.