The Australian newspaper reports Sajjad Hussain Noor, aged about 27, and two others were arrested by Indonesian police on Monday night.
Since the arrest of his suspected people smuggling rival Sayed Abbas in August, Sajjad has been Australia's prime target, the paper says, after first being arrested in 2009 and then freed on bail, before allegedly getting back into business.
There has so far been no official confirmation of the arrest from Jakarta or Canberra.
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