Indonesian police say they have worked with the Australian Federal Police to unravel a people-smuggling network that was aimed at bringing in fake Rohingya refugees to Australia.

The revelation comes as real Rohingya refugees took to the water to escape persecution in Myanmar and crowded camps over the border in Bangladesh.

Police in Indonesia have named three suspects, including a Rohingya man, as the organisers of a complex scheme to illegally bring people to Australia.

The director of general crime with Indonesia's national police said people smugglers organised fake papers for six Bangladeshi men who were initially brought by speedboat from Malaysia.

After a long journey through Kalimantan and Java they were eventually smuggled to the Papuan port of Merauke because it was closest to Australia.

The organisers then planned to hire a local fishing boat to bring the men to the Australian mainland.

Communities in Indonesia helped the men in their journey because they claimed to be fellow Muslim Rohingya fleeing persecution in Myanmar.

Police said sympathetic members of one Indonesian community even raised money to buy plane tickets for the men to fly to Merauke.

Rohingya children and refugees demonstrating in Bangladesh say they will not go back to Myanmar. ( AP: Manish Swarup )

Brigadier General Herry Rudolf Nahak said the men were actually Bangladeshis working in Malaysia who were convinced by the people smugglers that they would earn more money in Australia.

Indonesian police said one of the three alleged people smugglers was a Rohingya man. The other two were Bangladeshi and Indonesian.

"The modus operandi was designed by a Rohingya refugee, who entered Indonesia in the past, lived in Indonesia, fluently spoke Indonesian then he transformed to become a people smuggler who organised the trips for the Bangladeshis," Brigadier General Nahak said.

Bangladeshis under witness protection

The scheme came undone when Papuans in Merauke became suspicious and reported the strangers to local police.

The Bangladeshi men were picked up late last year and detailed the scheme to authorities.

They are now living in witness protection in Indonesia ahead of a trial of the alleged people smugglers.

This is the first time details of the police operation have been released.

These Rohingya Muslim women crossed over from Myanmar into Bangladesh with their sick children and were turned back towards the zero line border in Palong Khali, Bangladesh. ( AP: Dar Yasin, file )

Brigadier General Nahak said this was an international operation.

"Indonesian Police are working together with the AFP and NZ police, as [this matter is also in their] interest because they're the destination countries [of the people smuggler] and Indonesia was a transit country for the people-smuggling operations," he said.

Indonesian police said they seized ATM cards, airline tickets and cash equivalent to $A16,000 from the men.

News of the scam comes as legitimate Rohingya refugees fleeing Myanmar take advantage of calmer seas to attempt to enter Malaysia and Indonesia by boat. Late last week, 76 refugees were rescued on a boat off Indonesia. It had been adrift for nine days.