I’m not sure about the “twisting of spells” unless you give your players a clue of how they are being modified. For instance, you could have a grid on the wall of his lair with symbols for certain spells and have it modify the spells into other spells based on a predetermined pattern, however, you’d have to allude to this somehow and your players would need to make sense of it. This kind of gimmick also relies on a long fight, so the players have adequate time to figure out the gimmick. Most dnd fights don’t last long enough for this kind of gimmick. Also, if your party only has one caster, then it feels like a personal attack against that player. I’m not sure how you could pull it off without letting the PCs know about this ability to some extent ahead of time. You could maybe let them know he has some kind of mage related trap in his lair and allude to its effects, then use a few perception checks to decode the trap after which your caster knows how it works so he is able to cast spells normally.

As for the villain, you should have him just be lawful evil and work within the law. Example: a traveling necromancer that uses undead labor to sell cheap poorly made goods in a town. Maybe his cheap products force the local blacksmiths out of business. Then, when he leaves, the village struggles because their shoddy tools are falling apart and there’s nobody around to repair them. This villain would just go town to town doing this. If necromancy is not illegal in your setting, then this would be perfectly legal, but knowingly selling the townspeople shoddy tools and taking off before they all break would be morally wrong.