SYDNEY -- On the night before the most notorious scandal in Australian racing history, a team of conspirators was painting a racehorse.

The three men wore dishwashing gloves and, under the dim light of a stable, they drenched a talented horse named Bold Personality with hair dye. The next day, at Eagle Farm Race Course in Brisbane, they were planning to substitute him for Fine Cotton, a horse with a dismal record.

They drank until the wee hours, toasting their handiwork, talking about the money they would win from bookmakers across the continent. But the next morning, when they looked at the horse in daylight, they saw they had turned him red; not chestnut, but a bright, gleaming red.

This whole plot had been a comedy of errors, and the scene at Eagle Farm that afternoon was a farce. But the consequences would be anything but laughable. Not only did the conspirators go to jail, but the two most prominent racing families in Sydney had their lives permanently affected by a connection to the scandal. Their legal battles are still raging, and the Fine Cotton affair still is making headlines six years later.

John Gillespie, a former used-car salesman and a smooth-talking con man, had plenty of time to conceive and plan this ringer coup while he was serving a sentence in Brisbane's Boggo Road Jail. There he met a jockey, Pat Haitana, and he was most interested to learn that the rider's brother was a trainer. The con man already had selected the key personnel for his betting coup, but the trainer was a last, essential part of the team.

Almost as soon as Gillespie was released from jail, he contacted Hayden Haitana and outlined his scheme. Then, with financial backing from sources presumably from Australia's underworld he bought a nondescript horse with a mediocre record and sent it to Haitana. This was Fine Cotton.

He told the trainer to start running the horse and losing races as badly as possible. He later bought a similar-looking, but far more talented animal, Dashing Solitaire, the intended ringer, and sent him to the trainer, with instructions to prepare him for an upcoming distance race. But Dashing Solitaire ran through a barbed-wire fence and injured a leg. Gillespie was unperturbed. The scheduled coup now was only a few days away, so he hurriedly bought Bold Personality, even though the animal bore no resemblance to Fine Cotton.

When Bold Personality came out looking more like a fire engine, the men shampooed him back to his original color. The horse would have to run without looking at all like Fine Cotton. Gillespie assured his collaborators this didn't matter.

"I've got some of the stewards on my side," he said. "They'll all be betting on Fine Cotton. They'll all make sure they're looking the wrong way. And the same goes for the cops. They'll be backing the horse too."

It is uncertain how much of this was truth and how much was bluster, but the word on Fine Cotton was leaking out around the country. The ringleaders of the coup had found a shrewd gambler to put down $40,000 in bets for them, and the gambler asked bookmaker Robbie Waterhouse for aid in doing it.

Waterhouse suggested a Melbourne businessman who would be an ideal front man to make the wager. He was such a high-roller that a $40,000 bet from him wouldn't attract unusual attention from bookmakers. Waterhouse proceeded to make his own bets on Fine Cotton through his own agents.

And thus did the wagering on Fine Cotton snowball. Gillespie had told other people to bet the horse, and they told others, until the snowball turned into an avalanche on Saturday afternoon.

After opening at 33-1, Fine Cotton's odds plummeted to 7-2. Bettors scrambled to bet the hot horse.

Fine Cotton (Bold Personality) fought head-and-head through the stretch with Harbour Gold, and the track announcer's call was broadcast to rapt gamblers across the country: "Harbour Gold, Fine Cotton! Oh, Fine Cotton is going to hold on by a nose. He may have held on by a nose. The bookmakers won't be able to pay. . . . "

Gillespie was accepting congratulations from policemen who had backed the winner when his joy was interrupted by a chant from the vicinity of the winner's circle. "Wrong horse! Wrong horse!" a group of bookmakers' clerks were shouting in unison. "Wake up stewards! Official inquiry! Official inquiry!"

Racing officials rushed into the winner's enclosure and inspected Fine Cotton. The chief steward summoned Haitana and inquired: "Doesn't this horse look a bit lighter in color than the last time you raced it?"

Fifteen minutes after the race, Harbour Gold was declared the winner.

The gamblers had lost their money -- and much more. Haitana went to jail for a year. Gillespie, after absconding on bail, was found hiding in the cupboard of a house in Victoria and was jailed for four years. Many others had their licenses revoked.

But the people who lost the most were ones with seemingly peripheral connections to the scandal. Robbie Waterhouse was barred from racing, and so was his father, Bill, who had been the world's biggest bookmaker. Robbie's wife, Gai, the assistant trainer for one of Australia's most important stables, found her whole professional future in jeopardy. The controversy surrounding the Waterhouses' involvement, and their subsequent legal battles, would be the most enduring legacy of the Fine Cotton scandal.