Republican operative Scott Shires is accused of helping the head of an illegal-gambling ring hide the nature of his business, according to a state indictment.

Shires is alleged to have advised Jeffrey Castardi on how to disguise money laundering at Mario N Wongs, a restaurant Castardi owned.

Castardi and six others were indicted last month on allegations they ran an illegal-gambling operation and other rackets. Shires is not charged in the case.

Shires denied involvement in the scheme. He said he was not aware of what Castardi was doing during the period that his company, Shires Financial Group, handled bookkeeping matters for him.

Shires Financial went to work for Castardi after he opened the restaurant in late 2007. Around March 2008, Shires noticed that large credit-card payments made to Mario N Wongs were being withdrawn from a bank account as soon as the transactions cleared.

“There were large credit-card deposits coming in one day and the cash going out of the bank account the next day. (Castardi) said: ‘Don’t worry about it. A guy owed me some money, and I ran it through as a credit-card transaction.’ I said, ‘You can’t do that,’ ” Shires said.

He decided to drop Mario N Wongs as a client and gave Castardi three weeks’ notice to find another company to handle bookkeeping and tax matters.

“I said, I can’t hang around this dude,” Shires said. “They raided him right after the three weeks was up.”

Shires was among a list of people who “feloniously and knowingly conducted or participated, directly or indirectly, in the enterprise,” the indictment said.

Rob Shapiro, Colorado’s first assistant attorney general, who is handling the case, didn’t return calls for comment.

Shires has brushed up against the law before. He pleaded guilty to a misdemeanor charge of filing false tax returns in connection with a case against his one-time employer, Octane International Limited.

He was sentenced in June to a year’s probation and a $3,450 fine in the case.

Shires is well-connected in Colorado GOP circles and has run tax-exempt 527 political committees formed to influence elections in the state, including the Colorado League of Taxpayers and the Coalition for Energy.

Real estate developer James Elterman, who is charged with helping to finance Castardi’s operation and other crimes, referred Shires to Castardi.

“My only fault was that I didn’t go to the cops and tell them about my suspicions,” Shires said.

Tom McGhee: 303-954-1671 or tmcghee@denverpost.com