The investigation was carried out by the Sacramento Valley Sexual Assault Felony Enforcement Task Force, a recent collaboration of state and federal authorities aimed at eradicating crimes against children.
According to authorities, today's arrests in California's capitol are just the tip of the iceberg and could possibly lead to indictments against hundreds of more people across the country.
"This is part of a much larger investigation that will potentially include hundreds of persons across the United States," U.S. Attorney McGregor Scott was quoted as saying.
Scott said that federal authorities seized more than 5,000 images of children being sexually exploited and an estimated 300 video files stored on the suspect's hard drives.
One of the suspects is accused of swapping child pornography with people in Northern California and will be indicted on nine counts related to child pornography, Scott reported. That suspect faces a possible jail sentence of five years for each count.
The other two suspects have been indicted on 15 similar counts, including inappropriate sexual contact with minors in online chat rooms and trafficking child pornography over the Internet.
The federal investigation team was aided by a law known as the Prosecutorial Remedies and Other Tools to End the Exploitation of Children Today (Protect Act), which allows authorities to work alongside Internet Service Providers to intercept email, fax, or phone communications during a child pornography investigation.
The Protect Act was passed in 2003 by Congress and increases penalties for child pornographers.
According to the Associated Press, the investigation hit a landslide when one the three suspects chatted unknowingly with undercover agents about trafficking child porn and his desire to have sex with a minor.
Two of the suspects are being held in the Sacramento County Jail, while one was released on his own recognizance, authorities said.