Officer Jeffrey Walker, a 24 year veteran of the force and a member of the police department narcotics squad, was arrested on Tuesday night.
He was taken into custody leaving a home on 56th and Florence just before midnight. Police say the home belonged to an alleged drug dealer.
Walker has been a target of police internal affairs and the FBI for more than a year.
They allegedly have him on audio tape and on surveillance video talking to an FBI informant about schemes to set up known drug dealers in order to steal their drugs and cash.
"This involves drugs and ripping off drug dealers. I know about this case, don't know if he's done anything like this in the past. We're certainly looking into that to see if whether or not there is something more he's been involved in," Philadelphia Police Commissioner Charles Ramsey said.
Walker, according to the affidavit, confessed overnight after being caught with $15,000 in cash and a substantial amount of drugs in his possession outside the alleged drug dealer's home in Southwest Philadelphia
On Wednesday, police and the FBI raided Walker's Overbrook home seeking even more evidence.
"He's my neighbor. He's a great guy. Father, great neighbor, so I don't know him like that," neighbor Mina Stevens said.
"It's not something that sprang up overnight, it's something we've been working on for a while, but it's a good day when we can rid our ranks of a corrupt police officer," Ramsey said.
Ramsey has already launched the paperwork to fire Walker and freeze his pension.
The Fraternal Order of Police says it will not come to Walker's aid in any way including providing a defense attorney.