A man who was arrested last week on suspicion of theft in relation to the “misappropriation” of $18 million in connection with the Par-la-Ville hotel development deal has been released from custody.

According to a police spokesman, the 41-year-old is on bail while the investigation continues.

The Bermuda Police Service announced last week that the suspect had been assisting police with the inquiry, which is being led by Detective Chief Inspector Nicholas Pedro.

It relates to a loan made to Par-la-Ville Hotel and Residences Ltd by Mexico Infrastructure Finance that was intended to help to secure funding to build a hotel and residences at the Par-la-Ville car park in Hamilton.

The loan amount was guaranteed by the Corporation of Hamilton after legislative amendments by the Bermuda Government that allowed the municipality to use the parking lot property as collateral.

The funds were placed in a New York escrow account and subsequently withdrawn in 2014, but the developers defaulted on the loan, sparking legal action between MIF and the developers.

Michael Fahy, Minister of Home Affairs, said last year that a criminal complaint had been made to the police, and that efforts had been launched to attempt to locate the funds, much of which were reportedly sent to Gibraltar-based Argyle Ltd.

Meanwhile, the Corporation of Hamilton has been working to secure a loan to repay MIF, which has threatened to claim several corporation properties, including the Hamilton Fire Station, the Chamber of Commerce building and the Custom House, if the loan was not repaid with the interest.

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