Casinos always have been full of colorful characters, but rarely so colorful as the part-financiers of the planned racetrack and casino in Lawrence County: one an exotic dancer turned apparel designer, the other an Indiana businessman who captained one of the most spectacular business shipwrecks in recent U.S. history.

Stephen and Tomisue Hilbert, husband and wife, operate M.H. Equity Investors, a Carmel, Ind., company providing much of the financing for Centaur Inc.'s Valley View Downs. Last autumn, Centaur, an Indiana racing and gaming company, closed on a $1 billion financing package that will pay for the $428 million investment west of New Castle, as well as projects in Colorado and its home state. M.H. Equity supplied $200 million of that $1 billion package.

Students of the insurance and investment industries will remember that Mr. Hilbert co-founded Conseco Inc. nearly three decades ago. He was the CEO of the publicly traded insurance and investment giant until its stock plummeted. Conseco acquired a mobile home lender, a dubious investment that prompted a drop in per-share price from a $58 high to $5.62 by April 28, 2000 -- the day Mr. Hilbert was jettisoned.

The Post-Gazette placed two calls to Mr. Hilbert's office seeking comments for this story, and eventually was told by a go-between that he didn't intend to return the calls.

But Centaur CEO Rod Ratcliff said Mr. Hilbert would make a fine investment partner.

"Steve Hilbert is a respected businessman and entrepreneur, who has been licensed in the gaming industry in the past and who leads one of the Midwest's largest private-equity firms," Mr. Ratcliff said. "Centaur has enjoyed a long and successful relationship with Steve. ...We look forward to a successful conclusion as we again go through the licensing process in Indiana and Pennsylvania."

The relationship to which Mr. Ratcliff refers is the Argosy Casino & Hotel in Lawrenceburg, Ind.; Mr. Hilbert, through Conseco, acquired a $225 million stake in the paddle-wheel steamer in the mid-1990s. Conseco also acquired a 10 percent stake in Hoosier Park racetrack, a former Churchill Downs Inc. track near Anderson, Ind., now owned by Centaur and Mr. Ratcliff. (Conseco sought an interest in a Canadian racetrack called Resortport, but it was never built.)

Those acquisitions were controversial because they were "exotic" investments, far afield from Conseco's main business line, Mr. Hilbert's successors said in news accounts.

"Hilbert was investing Conseco's money in all sorts of different places," from radio stations to racetracks to IndyCar racing, said Ed Feigenbaum, publisher of the Indiana Gaming Insight newsletter. "But nothing that Conseco and Steve Hilbert touched in the 1990s did anything but turn to gold."

Then, quickly, it turned sour.

Already skittish from the fallout over Louis DeNaples, the Scranton-area businessman who was handed a casino license in December 2006 and indicted a year later, the Pennsylvania Gaming Control Board will be paying special attention to this case, the most recent entry to the state's roster of casinos and racetracks. The gaming board and state police are about to begin their background investigation into Centaur and its financiers, and board chair Mary D. Colins said she intends to be exhaustive so as to avoid any surprises, like those that surfaced in the DeNaples case.

There won't be many surprises on the Hilbert end of things -- the Conseco collapse and its legal reverberations were well-chronicled. Mr. Hilbert's net worth, in the years prior to the collapse, was said to be in excess of $400 million, but it wasn't terribly liquid, as he had steered much of his fortune back into Conseco's stock. The highest-paid CEO in Indiana was so bullish on the stock, in fact, that starting in 1996 he borrowed hundreds of millions through the company -- with the company's approval -- to buy more of it, a borrowing program that is now illegal.

And not a good idea, in retrospect, considering the company's impending nosedive and eventual bankruptcy reorganization. For three years, starting in 2004, Conseco's lawyers tried to win back the money they say Mr. Hilbert owed, more than $250 million, essentially calling the loans. (The attorneys for the "new" Conseco pursued other former top Conseco officials with the same vigor.)

Mr. Hilbert said he didn't have the money, and in a technical sense, he was right -- several years after his 1994 marriage to former exotic dancer Tomisue Tomlinson, his sixth wife, he began transferring much of his wealth into family trusts that bore her name. Conseco attorneys said he was trying to shield the money from creditors; he said they were legitimate transfers, noting that Mrs. Hilbert was a businesswoman in her own right, the titular head of the Tomisue Hilbert apparel company, which sells handbags.

With Tomisue, and even before they met, Mr. Hilbert led a breakneck lifestyle -- with enormous beach estates, expensive sports cars and racehorse investments, which ties to his interest in Centaur and its racetracks. Mrs. Hilbert traces her love of racetracks to a visit to Churchill Downs at age 9.

In December 2006, a settlement ended the legal tussle, and the next month, as part of the settlement, the couple was forced to release control of a 36-room mansion in Indiana.

"It's not like you should feel sorry for him. He's still got a beautiful home in a gated community," where Indiana Gov. Mitch Daniels also built a home, said Gary R. Welsh, an Indiana attorney. "He lived a very excessive life, in terms of his riches, which probably drew more scrutiny to him."

By the time Conseco won his mansion, Mr. Hilbert already was three years into his latest venture, a private-equity firm staked by billionaire friend John Menard, who founded the self-named Midwestern home-improvement store chain. Mr. Hilbert's stake in the company was at one point in his wife's name, a move that was contested as unlawful by Conseco's attorneys. Mrs. Hilbert also could not be reached, neither through her through her own Web site, nor through an attorney for M.H. Equity.

Friend, attorney and bank founder Mickey Maurer said Mr. Hilbert got a bad rap, and made for salacious headlines because of his lavish, jet-set lifestyle, not because he actually was a bad CEO or person.

"He did not escape with riches at the expenses of shareholders," as other CEOs have been accused of doing, Mr Maurer said. "Steve is honest. ... I would invest with him."

Sometimes overlooked is the fact that the Hilberts also were philanthropists, giving away millions of dollars, even as he was facing Conseco in courtrooms. Defenders also may note that Donald Trump, who knows a thing or two about bankruptcies and comebacks, was permitted to operate a casino in Gary, Ind. In fact, the two executives once teamed up to buy the marble General Motors Building in New York City, a $878 million marriage that dissolved after Mr. Hilbert's ouster from Conseco; Conseco also was the leading institutional investor in Trump's company stock.

But others wonder if Mr. Hilbert deserves the chances he's now getting, especially within the Indiana gaming community. "A lot of folks are wondering how it is he's been resurrected," Mr. Feigenbaum said.

Mr. Hilbert's investment in the Lawrence County casino might not be an issue for the gaming board, which eventually will determine whether Centaur is a "suitable" casino operator and has the financial acumen to manage the project. Then again, it might -- it's the gaming board's prerogative to investigate anyone tied to Centaur, including its debt-holders.

"I assure you the board will do a thorough and complete investigation, a financial and background investigation, in relation to the Valley View Downs application,'' board member Ken McCabe, a retired FBI official, said this week. "The board will not act [on the slots license application] until we are satisfied that we have all the information. ... We will not be rushed into any action.''

One question remains to be answered: Just how much day-to-day control will Mr. Hilbert and Co. have over the operations financed by his $200 million? If the deal was structured like a typical loan, it's unusual for common debt-holders to exert much operational influence. Equity-holders, on the other hand, expect more than just debt-plus-interest in return, and often want some input.

M.H., of course, is an equity company.

Outside of Mr. and Mrs. Hilbert, there's plenty more for the Pennsylvania Gaming Control Board to consider before it awards the casino license: In 2005, Centaur was blamed for inadvertently killing a slots-legalization bill in Indiana after creating a related controversy. The Indianapolis Star reported that Centaur hired a state representative to serve as CEO of a charitable foundation seeded with Centaur money, and also employed a state senator's marketing firm to do work for a Centaur casino in Colorado.

That was an issue because it's illegal in Indiana for a gambling company to give money to lawmakers' political campaigns; the hiring of the part-time lawmakers seemed designed to get around the ban.

The Pennsylvania Harness Racing Commission, in awarding the racetrack rights to Centaur, apparently was satisfied that the controversy wasn't a problem, but the gaming board -- which awards the casino license, separate from the harness racing license -- hasn't weighed in.

Mr. Hilbert likewise was investigated for violating the same ban. In 2003, Indiana State Police were contemplating charges that Mr. Hilbert had illegally donated tens of thousands of dollars to political campaigns and party committees. He later was cleared of wrongdoing by a special prosecutor, because although his company, Conseco, held interests in the Argosy and Hoosier Park casinos, Mr. Hilbert never had a "personal stake" in either one.