Five people were being questioned following a dawn raid by police on a house in Brighton.
More than £4,500 in stolen gold and silver jewellery and a stolen TV and driving licence were recovered in the swoop on the house in Hollingdean.
Officers also found a small amount of crack cocaine.
Inspector Rob Carden, who co-ordinated Operation Cleaver, said the floor of the house was littered with razor blades and used needles had spilt from an overflowing box.
Four kittens found playing in the squalor were examined by a former RSPCA inspector who made up part of the 12-strong police team.
Two women and three men were arrested and taken to Brighton police station for questioning.
Insp Carden said: "We had received a number of reports from neighbours about suspicious activities and we were pleasantly surprised when neighbours came out to thank us for taking action."
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