Personally, I would give him 24 hours to do a rewrite, and make it
absolutely clear that what he did was unacceptable, considered cheating
by many, but that I was giving him the benefit of the doubt and the
chance to prove he was capable of doing the work. And then I would
dock the grade for lateness.
Harsh? Perhaps. But odds are the kid thought he was pulling a fast
one, not actually cheating, but using a loophole. As a teacher, the
purpose of a test is just that, to test, to determine whether people
understand concepts or have learned to employ certain skills (essays
are, for this reason, nothing more than "take-home exams") under a
certain set of circumstances. This kid did not complete the
assignment in a way that proves his knowledge; therefore, one
cannot assume the knowledge exists and one cannot give the student
the same credit one gives to a student who has clearly demonstrated
what they know.
Hope this helps.