Kenneth Kornfeld (proper noun). Everyone will have fifteen minutes of fame, Andy Warhol said. Unfortunately for former Fortress Re President Kenny Kornfeld, his fame comes in the shape of notoriety, and looks set to last quite a lot longer than quarter of an hour. The collapse of Mr Kornfeld's fraudulent managing general agency has already led to an enormous $1.1bn arbitration decision against it in favour of underwriting pool member Sompo Japan Insurance. The award has garnered Mr Kornfeld some ink, but it hasn't cost him money directly, since only his Burlington, North Carolina-based agency was named in the arbitration. Nonetheless, Mr Kornfeld is not about to pass 'go' and collect $200. He may even be headed for another corner of the Monopoly board.

Japanese insurance goliath Sompo and its fellow post-merger monolith Aioi Insurance are to see Mr Kornfeld in the civil court, to answer charges of fraud. The insurers allege that Mr Kornfeld creamed off millions for personal gain, through accounting trickery and bogus reinsurance. Standing alongside him in the dock will be his partner in cream, Fortress Re Chairman Maurice (Chico) Sabbah, plus family members and other beneficiaries of the Japanese pool members' involuntary largesse. In the frenzy to recover lost billions, Fortress Re auditors Deloitte & Touche LLP are also being sued.

Mr Kornfeld's agency was in many respects a very successful aviation reinsurer. Backed with cash provided exclusively by distant Japanese insurers, Fortress was almost alone in writing reinsurance layers such as $400m excess of $50m of original loss. Most other underwriters refused to play in such low-level territory, so Fortress had about two-thirds of that entire strata of airline risk. Mr Kornfeld's stratum appears to have been to keep the premiums flowing in by charging much less than the technical price of the cover, in the insurance equivalent of the classic Ponzi scheme.

Cedants would have paid 10% more for better security, one broker said while Fortress was still in business, but there were scant markets even at that price: it would still have been below burning cost.

The findings of the arbitration panel (which included such luminaries as Caleb Fowler, the former President of CIGNA's property/casualty business) were damning. They declared that Fortress Re, under the guidance of Kenny and Chico, had engaged in actual and constructive fraud and material misrepresentation.

They artificially inflated the financial picture of Fortress Re in several ways. First, it is alleged that Mr Kornfeld and his partner purchased financial reinsurances which transferred no risk, and failed to account for the reinstatement premiums related to them. Second, they ceded 25% of all assumed risk (along with the accompanying premium) to Carolina Re, a Bermuda vehicle which they owned. Carolina Re owes Fortress a large fortune, but the bankrupt company has capital of just $62m. Mr Kornfeld and his associates were alleged to have siphoned away its earnings through dividends payable to themselves.

Fortress Re itself paid out hundreds of millions in unwarranted profit commissions, the arbitrators found. They were unwarranted because Fortress Re did not, in fact, make any profits. Sompo accused Mr Kornfeld and Mr Sabbah of extracting about $408m from the business in this way. Sompo attorney Elizabeth Sandza said in court: "This is not an ordinary commercial dispute. A few individuals skimmed off hundreds of millions of dollars from the pool." Fortress Re's lawyer countered with the claim that Fortress Re had paid profits of nearly $2bn to the Japanese pool backers over the years, but now that losses were due, they were crying foul.

Both parties appear to have been at fault. While the documents which Fortress Re sent to its pool members were incomplete, non-standard and misleading, the Japanese backers of the pool were naive in failing to demand better disclosure, and should have realised that the business Fortress Re was writing could only be uneconomic in the long run (and indeed, had they asked any aviation reinsurer other than Kenny Kornfeld or his colleagues, they would have been told as much). When Carolina Re was formed, the Japanese were informed by Mr Kornfeld and Mr Sabbah there would be no cost whatsoever to the pool's backers, according to Aioi. It seems that the regular profits the agency did remit to the underwriters were sufficiently large to prevent such questions being asked until it was far too late.

Now, with the Fortress in ruins, everyone is queuing up for any booty left to loot, including the liquidators of Fortress Re and of Carolina Re, as well as the underwriters of the pool. It is not yet clear how deep Mr Kornfeld's pockets will prove to be, but it looks very likely that he will have to empty them. And it will take a lot longer than fifteen minutes.