A group that police believed was organized to cut down on street crime by teaching business practices to inner-city youths has turned out to have been promoting an unusual kind of business: heroin.

The group, called Young Boys Inc., was really a 90-member heroin ring, in which teen-agers were paid commissions for peddling drugs, according to police officers who have been arresting alleged members -- many of them youths under 17.

"It's a first in my experience," said Sgt. James Spivey, who has been helping coordinate the arrests in a month-long crackdown.

Police have confiscated more than $25,000 from the arrested youths, including about $18,000 from one 16-year-old suspect. They also took in an unspecified amount of diluted heroin, some of it wrapped in packets made from stationery from Young Boys Inc.

Police say that the dope was delivered from vans used by Young Boys Inc. The group's leaders, two men in their 20s who have also been arrested, had an elaborate delivery system that included lookouts, merchandise handlers and salesmen, according to police.

"It was run just like a little business," a police source said.

"They had their laborers and their business managers. You had to be brought in and vouched for by somebody in the group, then work your way up. Many of them apparently did."

"The boys were paid about $250 a week against a commission to sell the stuff. Some of them were making more than their parents."

Detroit police began investigating Young Boys Inc. in early July, after youth officers noticed a rapid rise in heroin use in rundown neighborhoods on the city's Near West Side. Working with the department's narcotics unit, the officers began making arrests on street corners where most of the sales took place.

"When we got out there, it was so easy to make arrests it was almost pathetic," Spivey said. "They were selling dope on almost every corner."

The arrests, which began in late July, now total about 90.More than half of those arrested are under 17, the age of maturity in Michigan.

New state drug laws providing stiffer penalties for adult offenders may have led the heroin retailers to rely on their juvenile salesmen, authorities say.

"Much the same thing happened in New York a few years ago," said Police Inspector Isaiah McKinnon. "When the laws got tougher, adults running the show merely turned to the teen-agers as pushers."

Arrested youths under the age of 17 are rarely brought to trial in Michigan unless they are charged with murder. Most are processed through Juvenile Court, where proceedings are closed to the public, and penalties, if any, are relatively light.

Ironically, police crime records indicate that fewer of the crimes normally associated with teen-agers were committed in the areas where Young Boys Inc. flourished in recent months. Also, a majority of the youths arrested were not heroin users, which police say is unusual.

According to police department intelligence, Young Boys Inc. was founded about three years ago with the goal of cutting down on street crime by teaching business skills to juveniles. Department sources were unable to say what the organization did other than to participate in distributing heroin.