Pig farmer Hector Dick, 46, walked free after turning Queen's evidence against his former friend Nat Fraser.
His damning testimony helped convict Fraser of Arlene's murder.
But Arlene's family were furious that Dick, of Mosstowie, Elgin, in Moray had "lied and lied" to police for almost five years.
For a long time following Arlene's disappearance, it looked as though no charges would ever be laid.
No body was produced; police investigations made little headway. Not until five years - and £2 million - later were murder charges brought against Nat Fraser and two of his friends, Hector Dick and Glenn Lucas.
Only when Hector Dick turned Queen's evidence and spoke out against his former friend, did the Crown obtain a conviction; the charges were dropped against Dick and Lucas.
Nat Fraser collapsed in the dock as he was sentenced to serve at least 25 years. He was later reported to have said that he considered the sentence "a wee bittie harsh".
In February 2003, HECTOR DICK faced losing his house and business after admitting his part in an alcohol smuggling racket.
Customs and Excise officers are poised to question the farmer after he told the Arlene Fraser murder trial of his involvement in 'bootleg booze'.
Mrs Fraser's husband Nat was found guilty of her murder earlier this week and sentenced to life in prison.
Dick, 46, had also been accused of taking part in the killing but the charges were dropped when he agreed to give evidence against his former friend.
Daily Mail, February 7th, 2003
THE family of Arlene Fraser last night furiously rejected a plan by a man once accused of her murder to set up a fund for her children.
Farmer Hector Dick wants to use cash he received for selling his story to a newspaper to establish a trust fund for Jamie and Natalie Fraser.
But the children's grandparents - who were not consulted about the proposal - last night branded the offer as 'blood money'.
Arlene's father, Hector McInnes, said: 'Hector Dick maybe thinks he can ease his conscience by throwing money at Natalie and Jamie but he is wrong - it's too late for that.
Advocate Paul McBride QC alleged that Hector Dick had committed "the most breathtaking and scandalous perjury".
Paul McBride QC, defending Mr Fraser, accused Mr Dick of being "a habitual liar, a serial liar" when he was being questioned by detectives.
The farmer admitted that he had told lies to police, saying: "My loyalty was to Nat at that time."
Mr McBride described Mr Dick as a "serial liar" and a "cold and calculating man". He added: "You think nothing about lying morning, noon and night, you think nothing about making up stories morning, noon and night and you think nothing about obfuscating the truth morning, noon and night."