Thirteen men and two women have been arrested in Newcastle on suspicion of conspiracy to rape.
Northumbria Police said 13 properties in the city had been searched as part of Operation Sanctuary.
A force spokesman said the inquiry involved allegations of sexual assault involving teenage girls and young women – some in the care of the local authority.
The city council said it was working with police to help alleged victims.
Council leader Nick Forbes said the authority was informed about the investigation a week ago and he was “shocked and appalled” by the allegations.
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