Fyers wants information on the whereabouts of Yao Fei, Oliver isnt saying. So Billy Wintergreen takes to using him as a pincushion.
The pincushion scar is not the giant stitched slash on Oliver's abdomen, its a smaller scar about 1-2" below that.
Oliver's two prominent slashes on his left pectoral are the result of this torture, we only see Billy slash once.
Both sets of scars are present as of 2x02.