Despite Arnold's successes, he was passed over for promotion by the Continental Congress. Congress investigated his accounts and found that he was indebted to Congress after spending much of his own money on the war effort. Arnold was frustrated and bitter with the alliance with France and the failure of Congress to accept Britain's 1778 proposal to grant full self-governance in the colonies and opened secret negotiations with the British. In July 1780, he was awarded command of West Point. Arnold's scheme was to surrender the fort to the British, but it was exposed. Arnold fled down the Hudson River to the British sloop-of-war Vulture, avoiding capture by the forces of George Washington.

Arnold received a commission as a brigadier general in the British Army, an annual pension of £360, and a lump sum of over £6,000. He led British forces on raids in Virginia, and against New London and Groton, Connecticut, before the war effectively ended with the American victory at Yorktown.

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