7 Are Arrested in Pirated-Tapes Case : Crackdown: Alleged leader of the operation is taken into custody at his Fountain Valley home. Deputies seize 25,000 tapes.

Riverside County sheriff’s deputies confiscated about 25,000 audiotapes and arrested six men early Wednesday in a raid on what they called a major piracy operation.

Meanwhile, deputies arrested the alleged leader of the operation, Mohamad Issa Halisi, 38, at his Fountain Valley home, where authorities seized $16,000. All seven men were booked on suspicion of fraudulent labeling of consumer goods, a felony that can result in a prison sentence.

“I don’t know what’s going on,” Halisi said as he ducked to avoid a television camera. “I don’t know why they’re doing this.”

Sheriff’s deputies and recording industry experts said the raid was a significant blow to the record-pirating industry. Record companies say they are losing about $400 million a year to the counterfeiters and are working with federal and local authorities to combat the problem.

Industry experts said the Glen Avon operation was capable of displacing $68 million in annual legal record sales.

“This is the biggest one of these seizures that we’ve ever made,” said Riverside County Detective Henry Sawicki. “This is a major operation.”

Deputies raided the Glen Avon house just after dawn Wednesday. Inside, they discovered three high-speed tape machines and several men copying tapes. According to officials from the Recording Industry Assn. of America, which initiated the investigation, the Glen Avon-based piracy ring could produce 7.6 million illegal tapes a year.

The Washington-based association is a nonprofit organization whose members produce and distribute nearly all legally recorded music in the United States. Chief among the organization’s duties is fighting piracy, and officials there said they have heard reports for years indicating that Halisi was involved in illegal tape manufacturing.

“This guy has been a thorn in our side for quite a while,” said Frank Creighton, coordinator of investigative operations for the association.

After finally locating Halisi--who detectives said uses a number of aliases--the association put him under surveillance about a month ago, Creighton said. Last week, investigators said, they found 70,000 tapes at a New Orleans storage facility where Halisi’s organization had shipped tapes.

That raid led investigators to the Glen Avon house, Creighton said.

In addition to the high-speed dubbing machines, the Glen Avon house contained equipment for packaging tapes and millions of cardboard inserts with cover designs. Cots were on the floor of one room, as well as inside a trailer behind the house, and detectives said it appeared that the operation’s employees worked in two shifts.

Although the boxes inside the house included some popular music and country-and-western tapes, the vast majority were Spanish-language music cassettes.

Pirating of Spanish-language music has become the fastest-growing segment of the illegal taping industry, according to industry experts. The tapes are made in small factories and usually sold at swap meets or through street vendors.

Although no precise figures exist, Richard Meruelo, who operates a chain of Latin music stores in Southern California, said at least 30% of his potential business is lost to piracy. That figure is widely echoed among industry analysts.

“Piracy is really, really hurting us badly,” said Dave Palacio, executive vice president of Capitol/EMI Latin Records. “It hurts us, it hurts our employees. And it hurts the artists an awful lot.”