Opposition Senator Diallo Rabain has retracted a claim made in the Upper House that a top executive for developers Desarrollos Hotelco Group had been imprisoned for fraud.

The Venezuelan company is currently in negotiations with Government to develop a hotel and casino on the former Club Med site in St George’s.

“When I am wrong, I have no qualms admitting that I was,” Sen Rabain told the Senate, one week after charging that a chief executive for the firm had been “prosecuted and jailed for running a Ponzi scheme”.

Government announced the signing of a memorandum of understanding with Desarrollos back in May. Last month, the firm was granted an additional 60 days on its period of exclusivity.

The deal came under Opposition fire after Desarrollos was reportedly embroiled in a lawsuit over a $15 million loan for another development, the Aruba Hotel.

After his remarks in the Senate, Sen Rabain repeated the fraud claim to broadcaster ZBM, prompting a rebuttal in Parliament from Tourism Minister Shawn Crockwell.

The Minister told MPs on Friday that a Desarrollos director was among the parties named in a civil action filed in the United States over the loan, taken from an investment fund, which he said had been procured by a third party.

Sen Rabain conceded yesterday that his initial statement had been incorrect, adding that a principal for the chosen developer was currently involved in action to recover money “alleged to have been received from what is alleged to have been the proceeds from a Ponzi scheme”.

“I do not want this misstep to be used to detract from the basis of my full statement pointing out the One Bermuda Alliance’s lack of transparency on this project as well as others,” Sen Rabain said.