Sydney - Indonesian authorities have arrested an Iranian-born Australian resident who they suspect headed a people-smuggling network that spanned the country, a report said on Tuesday.
Mohammad Abdi, aged 36, was detained at an apartment in Jakarta on Monday along with two other Iranians, The Australian newspaper said, citing Indonesian police.
"Right now we think he's a big player," said Lieutenant-Colonel Tahi Damanik from the Indonesian police's anti-people-smuggling taskforce.
"He has a big network including to Australia but we have not confirmed [the entire] network yet."
Australia is struggling with a flood of asylum-seeker boats, primarily from Indonesia, with arrivals topping a record 16 000 last year.
The boats are usually rickety, overcrowded fishing vessels with several sinking in recent years, killing hundreds of people and underscoring the perils of the journey.
The newspaper said many of those making the dangerous voyage to Australia via Indonesia originated in Iran, each paying people-smugglers thousands of dollars.
Abdi, who has a wife and son in Melbourne, denied he was a smuggling kingpin when confronted by the The Australian after his arrest.
"Where are the people?" he said. "I am living in Melbourne now, my family is in Melbourne and 10 months ago I am coming here [Jakarta] for business."
Abdi said he travelled to Australia from Indonesia two years ago as a UN-registered refugee. The Australian said it understood he arrived by boat as an asylum-seeker.
The report said the anti-people-smuggling taskforce's attention was drawn to Abdi by the 8 May arrest in Indonesia of another foreigner, Habib Abdullah, in the company of about 30 asylum-seekers, mostly Iranians.
It said a day earlier, police had photographed Abdullah and Abdi at the Jakarta apartment block where he was arrested.