The alleged leaders of a Melbourne-based prostitution syndicate have appeared in court after police raids on several brothels, apartments and businesses.

Mae Ja Kim, Moon Ja Kim, Zhe Fang, Huan Wen Ye and Xing Jin have been charged with dealing in the proceeds of crime.

Detectives will allege the syndicate managed about 100 female sex workers and took a cut of their wages.

The Melbourne Magistrates Court was told four of the five accused are related.

Xing Jin was released on bail last night.

His four co-accused have been remanded in custody until Friday, when they are also expected to apply for bail.

Police confiscated about $1 million worth of goods, including luxury vehicles, in the raids.

The raids were part of Operation Kitrino, launched last year after the Australian Federal Police (AFP) received a tip-off about the activities of an alleged illegal brothel syndicate.

Police allege the syndicate operated outside the licensed system and earned $500,000 in the past five months.

Sorry, this video has expired AFP footage of raid on Melbourne brothels

AFP Detective Superintendent Ian Bate says police are still investigating the operation, but it is clear they were managing the women when they were not licensed to do so.

"They were providing a number of brothels with these sex workers," he said.

"They were taking money in relation to the services provided and they were indeed rostering the women, placing them in the different brothels, providing accommodation, charging them for it, providing them other services such as taxi fares and charging them for it."

Detective Superintendent Rod Jouning from Victoria Police believes the exploitation of sex workers is not common.

"It's our view that it's not a large issue but the exploitation of women in any sense is intolerable," he said.

Dr Caroline Norma, an academic from RMIT who researches the Victorian sex industry, believes the problem is entrenched saying there is a standard business model.

"These women come into Australia and get placed into these illegal brothels and then over time, once they've been had prostitution done to them in these venues and the pimps and the businessmen have made money off them, then they're moved into, through networks of the legal brothels," she said.

"But they're moved into these legal brothels on a subcontracted basis."

Dr Norma says this case shows that the regulation of the sex industry, which was supposed to protect women, is not working.

"The regulation is entirely about protecting the public and protecting the customs or the sex industries, not about protecting the women in the industry," she said.