Jay Z -- Alleged Extortion Plot Over $20 Million Master Recordings

A collection of Jay Z master recordings -- valued between $15 and $20 MILLION -- is at the center of an alleged theft and extortion plot ... and TMZ has learned, police have already nabbed the tapes.

Law enforcement sources tell TMZ ... a producer named Chauncey Mahan -- who worked with Jay Z from 1998-2002 -- was questioned Friday in connection with the alleged plot.

Here's the backstory ... Jay Z's Roc-A-Fella Records recorded a boatload of master recordings between 1998 - 2002. We're told in 2002 the masters went missing -- Jay Z and his people assumed they were lost.

Fast forward to this past Friday. Mahan apparently had a number of the masters in his Northridge, CA storage facility. Law enforcement sources tell TMZ ... Mahan allegedly contacted Live Nation -- which has a joint venture with Jay Z called Roc Nation -- and said he would either let the tapes go up for auction or give them the tapes for a $100K "storage fee." We're told Mahan eventually agreed to take $75K.

We're told on Friday Mahan went to the storage facility to seal the deal with Jay Z's people. Little did he know the LAPD had been contacted by Jay Z's people and showed up. We're told cops then detained Mahan and he agreed to come into the station for questioning. He also agreed to let the LAPD take possession of the tapes until a judge determines ownership.