A brother and sister from Winnipeg have been found guilty of using ATMs to launder thousands of dollars earned by trafficking cocaine after an 18-month, multi-city police sting dubbed Project Sideshow.

Oliver Banayos was convicted of one count of trafficking cocaine and another of conspiracy to traffic cocaine on June 28.

The same ruling simultaneously found Banayos and his sister, Carol Banayos, guilty of several offences related to money laundering, including one count of laundering proceeds of crime.

The pair were among 14 people from Winnipeg, Toronto and Vancouver who were arrested and charged as part of the Project Sideshow investigation.

The investigation started in early 2012 and ended in February 2014 when more than 200 charges were laid among some of Winnipeg's high-level drug traffickers.

In 19 different searches on the last day of the investigation, officers seized cocaine, ecstasy, ketamine, marijuana, drug trafficking paraphernalia, various firearms and ammunition, nine vehicles and $301,800 in cash.

Winnipeg police vehicles on Manitoba Avenue as part of a raid related to Project Sideshow. (Caroline Barghout/CBC)

At the time, Banayos was accused of being at the centre of the organization and faced multiple drugs and weapons charges. The June 28 ruling only dealt with his trafficking and laundering charges.

'Leadership role'

In his ruling, Manitoba Justice Shane Perlmutter included dozens of text messages sent between Banayos and others involved in trafficking and described Banayos as having a "leadership role" in the hierarchy based on the texts and expert testimony.

None of the texts refer explicitly to cocaine, instead using terms like "work," which expert Blake Wawryk testified is standard language for drugs, or "paint," which the Crown argued was code for cocaine. The messages also exclude participants' real names, referring to others by "buddy," which Wawryk said is common practice among drug traffickers.

Based on the texts, expert testimony and evidence gathered by the Winnipeg Police Service, Perlmutter wrote he was satisfied beyond a doubt about Banayos's guilt, referencing texts to him requesting drugs and others negotiating the exchange of cocaine and money.

ATMs used to launder cash

Project Sideshow investigators seized at least six privately owned or "white-label" ATMs.

The Crown argued money was "cycled" through machines owned by Oliver Banayos to enter the legitimate banking system via bank accounts controlled by Carol Banayos.

Carol Banayos maintained she wanted to help her brother set up a lawful ATM business as his nominee and her counsel argued she had no basis to believe cash coming from Oliver Banayos was illegitimate.

In his ruling, Perlmutter found Banayos "willfully blind" to the source of the cash.

"It is apparent to me that Ms Banayos would have suspected and realized the probability that the source of the funds was from the sale of drugs, but refrained from obtaining the final confirmation because she wanted to deny knowledge," Perlmutter wrote in his ruling.

Recently, RCMP officers seized six ATM machines believed to be used by high-level drug traffickers to launder money. 2:04

He describes one occasion in July 2013 when Carol Banayos picked up $100,000 from the bank in cash, put it into a cardboard box and placed it on the rear seat of her vehicle.

In September of that year, intercepted police communications show she met an individual at a Salisbury House to hand off thousands of dollars in a "Dollarama" bag.

"If this was a legitimate business, I would expect Ms. Banayos to have been more careful in dealing with these significant amounts of cash," he wrote.

Oliver and Carol Banayos were found guilty of conspiracy to possess proceeds of crime, possessing proceeds of crime, conspiracy to launder proceeds of crime and laundering proceeds of crime.

Oliver Banayos was additionally found guilty of trafficking cocaine and conspiracy to traffic cocaine.