Step 1:
Let's start out by creating a new file. I used a 400x300 pixels canvas set at 72dpi, and I filled my background with black. Now select the Polygon Tool and set the sites to 4 with anti aliased checked, under polygon options use the settings below.
In a new layer draw a black polygon with 110 x 110 px dimensions.
Step 2:
Under Layer Style(Layer > Layer Style) add an Inner Shadow and Gradient Overlay blending options to your white ellipse layer. Then set the layer's blending mode to Darken.
Step 3:
In a new layer draw an ellipse with 70x78 px dimensions and #FFE09D color shade, this will be the head of your bad guy avatar. Then under Layer Style(Layer > Layer Style) add a Drop Shadow, Inner Shadow and Gradient Overlay blending options.
Step 4:
Now add the eyes, in a new layer draw 2 white ellipses on the head design. Then draw smaller gray ellipses on the white ellipses.
Step 5:
Now add a simple nose design similar to the eyes.
Step 6:
Create a new layer then draw a black ellipse with 24 x 27 px dimensions by the nose. Then under Layer Style(Layer > Layer Style) add an Inner Glow and Stroke blending options.
Step 7:
In a new layer draw a red ellipse with #FF0000 color shade and 20x13 px dimensions on the black mouth design. Then under Layer Style(Layer > Layer Style) add an Inner Glow and Gradient Overlay blending options.
Step 8:
In a new layer draw a black ellipse with 91 x 38 px dimensions on top of the head, this will be part of the hat.
Step 9:
Now create a new layer then draw a dark gray ellipse with #1E1E1E color shade and 57 x 97 px dimensions. Then use the eraser tool with a soft brush to erase the bottom half of the ellipse shape.
Step 10:
Under Layer Style(Layer > Layer Style) add an Inner Shadow, Inner Glow and Gradient Overlay blending options to the erased ellipse layer.
Result:
