A Canadian company raked in $4-million from the sale of images of nude Eastern European boys, Toronto police said on Thursday, revealing details of a major international child-pornography investigation that rescued hundreds of victims.

‪The company, Toronto-based Azov Films, sold mail-order DVDs and streamed online videos of naked boys from Germany, Romania and Ukraine, which it marketed as naturist movies and claimed were legal in Canada and the United States.

After three years of investigation, 348 suspects were arrested in dozens of countries around the world, from Australia to Sweden to Mexico.

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Sources say the investigation identified 10 to 15 children in Ukraine and Eastern Europe, who modelled for photographers connected with Azov.

‪In addition, police said, as Azov clients were identified around the world, police found other children who were within reach to those customers and were either physically abused or recorded in illicit videos.

At least 386 minors were removed from harm's way, said Inspector Joanna Beaven-Desjardins, commander of the Toronto police sex crimes unit.

There were 108 arrests in Canada, including 50 in Ontario and at least 45 in Quebec. An additional 76 people were charged in the United States.

Canadian suspects who were arrested included 40 school teachers, nine doctors and nurses, nine clerics and six law-enforcement personnel, Insp. Beaven-Desjardins said.

In one case, police searched the home of a retired teacher and seized 350,000 images of sex abuse and 9,000 videos.

"We've worked a lot of big cases. This is by far the biggest," one official said.

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The head of the company, 42-year-old Toronto resident Brian Way, has been in custody since his May, 2011, arrest after an online undercover operation.

‪Records at the Finch Avenue courthouse in Toronto show that, in addition to indicting him with 23 child-pornography-related criminal counts, prosecutors took the unprecedented step of designating Azov Films as a criminal organization and charging Mr. Way with giving directions on behalf of a gang.

‪Mr. Way's mother, Sandra Waslov, who is believed to be in the United States, was named as a co-conspirator, along with a German videographer, Markus Rudolph Roth. Ms. Waslov is still at large, American officials said.

‪‪According to U.S. court documents, the Azov investigation was prompted by about 20 complaints to Toronto police.

‪Some of the complaints came from other law-enforcement agencies, some from cyber-tipsters and even some from business rivals of Mr. Way, sources said.

Insp. Beaven-Desjardins said police first heard about Azov in 2005 but did not pursue a case against the company. The force had a better case by the time it looked at Azov again in 2010 because the videos were more clearly against the law, she said.

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‪Azov was not exactly a covert operation: It was incorporated, held trademarks and fought for them in very public legal battles that stretched over years.

‪Starting in 2004, David Eisenlohr, a California mail-order distributor selling what he calls European naturist videos, complained to the U.S. Patent and Trademark Office that Mr. Way was stealing his films and reselling them online at a cheaper price.

‪Mr. Eisenlohr then came to the attention of U.S. investigators in March, 2006, when photo-lab employees at a Wal-Mart in Virginia saw a man, David Tetterton, trying to print explicit photos from their self-serve kiosk. Evidence seized from Mr. Tetterton's house led to Mr. Eisenlohr, who was indicted with trading child pornography.

‪Even as he faced criminal charges, Mr. Eisenlohr continued his campaign against his Canadian competitor. In 2007, he wrote a letter to then Canadian justice minister Rob Nicholson to complain about Mr. Way "stealing my intellectual property using the internet" and ask whether there were laws in Canada to stop him.

‪"It's crazy, guys arguing over what we consider child-exploitation material," one police detective said about the feud.

‪In court, Mr. Eisenlohr successfully argued that his nude videos were not pornographic and he was acquitted in 2009.

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‪The following year in Romania, a German man arrived in the Transylvanian city of Zalau and began offering martial-arts classes to local boys.

‪The man was Mr. Roth and he was arrested in August, 2010, and sentenced to three years of prison for taking more than 100 pornographic films of children. Authorities said the films were sold to Canada at $1,000 a piece.

Two months after Mr. Roth's arrest, Toronto police and the U.S. Postal Inspection Service began their Azov investigation, accessing the company website and making undercover purchases.

‪They found that orders to the U.S. transited through a warehouse near Buffalo before being shipped by USPS Priority mail.

‪Toronto police executed a search warrant at Azov's Etobicoke offices on May 1, 2011, and seized hundreds of DVDs, computers, business records, shipping labels and customer order histories, according to U.S. court documents.

‪Several of the American defendants contend the videos they bought aren't pornographic at all, but just legal videos of naked boys, using the same argument that led to Mr. Eisenlohr's acquittal. U.S. courts so far have sided with the prosecution and a number of defendants have already been found guilty.

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‪In Canada, the Criminal Code's definition of child pornography includes images where a minor's genitals are depicted for a sexual purpose.

‪Canadian police say they've obtained legal opinions from prosecutors that the material sold by Azov qualified as child pornography.

"What did they think they were buying?" one officer said about customers who argued they bought legal naturist films.

With reports from Renata D'Aliesio, Ann Hui and Anna Mehler Paperny.