LOS ANGELES—Forty-two members of what prosecutors call a San Fernando Valley-based white supremacist gang have been arrested in connection with a federal indictment unsealed Wednesday alleging a years-long criminal operation that included drug trafficking, weapons violations and COVID-19 and loan fraud.

According to the U.S. Attorney’s Office, 29 people named in the indictment were arrested Wednesday in a series of raids involving the Los Angeles Police Department and other agencies. Thirteen other defendants were already in custody, prosecutors said.

Prosecutors said the gang has been allied with the Aryan Brotherhood and Mexican Mafia, and its members use “Nazi tattoos, graffiti and iconography to indicate their violent white supremacy extremist ideology.”

A total of 68 defendants are named in the 76-count indictment, which alleges offenses including conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act, conspiracy to distribute controlled substances, distribution of controlled substances, bank fraud, conspiracy to commit bank fraud, aggravated identity theft, possession of a firearm in furtherance of a drug trafficking crime and unlawful possession of a firearm and ammunition by a felon.

The gang’s “violent white-supremacist ideology and wide-ranging criminal activity pose a grave menace to our community,” U.S. Attorney Martin Estrada said in a statement announcing the indictment. “By allegedly engaging in everything from drug-trafficking to firearms offenses to identity theft to COVID fraud, and through their alliance with a neo-Nazi prison gang, the [gang is] a destructive force. In prosecuting the members of the ... criminal organization, our office is carrying out its mission to protect the public from the most dangerous threats.”

During the investigation, law enforcement seized “large quantities of illegal firearms, and dozens of pounds of fentanyl, methamphetamine, and heroin,” prosecutors said.

The indictment alleges criminal activities dating back to at least December 2016, saying the gang used social media—including a members-only Facebook group—to share information and target people who violated the gang’s rules. It alleges that “to generate revenue for the gang, its members trafficked narcotics, including fentanyl, heroin and methamphetamine,” prosecutors said.

Gang members also generated revenue through robberies, identity-theft schemes and financial fraud, including bogus applications for Paycheck Protection Program funds, where were made available to assist businesses impacted by the COVID-19 pandemic.

“The proliferation of gang-related organized crime deteriorates the core of our society,” Los Angeles Police Department interim Chief Dominic Choi said in a statement. “Taking guns out of the hands of gang members and drugs from our streets is just one more step towards reducing this deterioration. Today is yet another example of how local, regional, and federal law enforcement, with a matched dedication, are working together to investigate, apprehend and prosecute criminals.”