Toronto police say they have shut down a sophisticated illegal DVD operation that was copying and distributing thousands of pirated movies, including some still being shown in theatres.

Officers arrested one person during the raid at a storage warehouse near Finch Avenue and McCowan Road on Thursday.

Police hauled away boxes of bootlegged movies and computer equipment that they said was being used to copy the movies. At least a dozen printing presses, allegedly used to design the film case covers, were also seized.

Investigators said a false wall built inside the warehouse was used to hide the operation.

Police said the movies were being sold on the streets and to small retailers for a few dollars each. The operation had been running for at least four months, said investigators, who had the place under surveillance.

An illegal movie operation is a very profitable business, said Det. Jim Giczi, the lead investigator.

"This is a commercial operation here and it's for profit, and it's a lot of profit," Giczi said.

Illegal DVD rings are costing Canada's movie industry about $138 million a year, according to Gary Osmond, of the Canadian Motion Picture Distributors Association.

"It affects the whole industry -- from the retail merchant, to the producer to the actors -- it affects everybody up the chain," Osmond said.

Police remind residents that it is illegal to be in possession of pirated movies.

Joel Delosreyes, 37, of Toronto, has been charged with possession of stolen property and fraud.

With a report from CTV's John Musselman