Toronto police describe the Project Spade operation as one of the largest child porn busts they've ever seen.
"It is alleged that officers seized hundreds of thousands of videos detailing horrific sexual acts against very young children, some of the worst that they have ever viewed," Inspector Joanna Beaven-Desjardins said.
Police said 108 people were arrested in Canada and 76 in the U.S. Others were arrested in other countries.
Australian Federal Police commander Glen McEwen on Friday confirmed that 65 men had been arrested in Australia as a result of the Canadian investigation, and six Australian children had been removed from harm.
Police said the children were "rescued from child exploitation" but did not give more details.
School teachers, doctors and actors were among those arrested.
Beaven-Desjardins said the investigation began with a Toronto man accused of running a company since 2005 that distributed child pornography videos.
Police allege Brian Way, 42, instructed people around the world to create the videos of children ranging from 5 to 12 years of age, then distributed the videos via his company, Azov Films, to international customers. The videos included naked boys from Germany, Romania and Ukraine, which it marketed as naturist movies and claimed were legal in Canada and the United States.
Police said they executed a search warrant at Way's company and home, seizing about 1,000 pieces of evidence: computers, servers, DVD burners, a video editing suite and hundreds of movies.
Way was charged with 24 offences, including child pornography. He is in jail. Police also designated Azov Films as a criminal organization, charging Way with giving directions on behalf of a gang. Beaven-Desjardins said this is the first time in Canada that anyone has been charged with being a part of a criminal organization in regards to child pornography.
Police said they began their investigation in 2010 and worked with Interpol in more than 50 countries including Australia, Spain, Mexico, Norway and Greece.
"This operation shows that international police cooperation works. Despite large amounts of material and that this is time-consuming work, this shows that the Internet is not a safe haven for crimes against children," Norwegian police spokesman Bjoern-Erik Ludvigsen said in a statement.
The U.S. Postal Inspection Service said it began its investigation by accessing the company website and making undercover purchases.
Beaven-Desjardins said the investigation is ongoing and believes more arrests will be made.
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