Choose your policy before you try to decide the details of following it. You have only three choices.

1. You may fix it in-game. (Since this is an in-game problem, that's perfectly reasonable.) Guards arrest him, and any other PCs who defend him. In a medieval culture, he will probably be put to death soon.

2. You may fix it out-of-game. Tell him that behavior of that sort is not fun for you or the other players. (Verify that this is true, first.) Then make it clear that he can choose to play the game the rest of the group are playing, or drop out. Treat him cordially in any case. There's nothing wrong with him wanting to play a different game.

3. Don't fix it. Allow him to warp the game into what he wants to do.

There are no other options. Pick the one you (and the other players) find most palatable. [Or pick the one you and the other players find least unpalatable.]