Only Action News was on the scene at Continuous Music along the 2800 block of Germantown Avenue just after 3:30 p.m. Tuesday.
Detectives and recording industry investigators say it is a place where thousands of counterfeit CDs are delivered, trafficked, and resold.
They say illegal copies are manufactured at the business and sold over the counter as well.
Police raided the business and confiscated CD copy machines and computers, as well as merchandise that was clearly counterfeit.
"The value's estimated in the tens of thousands right now and there's also equipment we believe may be used to produce these counterfeit CDs," Philadelphia Police Sgt. Joe Cella said.
Police say much of the knockoff merchandise from operations like this one go to stock the tables of street vendors all across the city, plus they generate big profits for those in charge of this illegal industry.
"The employee here was saying his boss obtains these knockoffs for about $1.50 and he sells them for about $5," Cella said.
Ultimately, police say everyone is getting ripped off here: the artists, legitimate merchants, and consumers who pay top dollar.
"Rips off everyone. They're entitled to the royalties for their talents," Cella said.