Oliver’s flashback shows the man on the island showing him how to shoot the bow and arrow, and he’s captured and tortured after he refuses to admit that he knows the man they are looking for. The man later rescues him from Deathstroke, and the man admits Oliver was a lot stronger than he originally thought him to be.
Back in Starling City, Oliver was arrested by Detective Quintin Lance on suspicion of being the vigilante, as well as a number of other charges. He requests Laurel as his lawyer, much to the protest of Moira and Walter, who begrudgingly agrees to represent him.
Oliver admits to Diggle that getting arrested was all apart of his plan, as the appearance of Oliver and the Hood was too coincidence for someone not to notice. He sends Diggle out to do some investigating into a German Arms dealer who just arrived in Starling City to sell some guns to local gangs, and Diggle later poses as the vigilante while Oliver throws a prison themed party at his house while under house arrest.
After turning down a plea from the District Attorney, Oliver asks to take a polygraph to convince Detective Lance that he isn’t the masked vigilante. During the test, Oliver has a number of flashbacks to his torture on the island and he admits to killing Sarah when he asked her to come onto the yacht with him.
Moira meets with a secret associate that is aware of the list, and sees the vigilante as a threat. He is obviously worried about Oliver being the vigilante, and tells Moira as such during their meeting. He later sends a assassin to kill Oliver, who is thwarted by Detective Lance.
Walter Steele attempts to move the remains of the Queen’s boat, the Queen’s Gambit, from the warehouse he had found it in, but is shocked when the man he asked for help is murdered later that night. He calls Moira to confront her about the yacht, and later leaves the house after she confronts him about her deception.
Laurel reaches out to Oliver after his polygraph test, and admits what happened to her and her father after Sarah died. She asks to see his scars, and he later admits that he doesn’t want to be seen as weak and that is why he doesn’t like to talk about his time on the island.