A former sailor, who asked to be identified only as Bridget, revealed last month other sailors told her young men aboard the HMAS Ballarat frigate had been anally penetrated with water bottles and markers.
"People were set upon by members and stripped off and had things essentially put in their bums," she said.
Investigators said they have reason to believe the three suspended sailors may have committed the offenses.
Investigators are turning over evidence to the Director of Military Prosecutions, the Australian Broadcasting Corp. reported Wednesday.
A second investigation was opened to determine if there were any broader procedural problems related to the allegations.
"I am very keen to remain as open and transparent as possible without compromising the investigative process," navy chief Vice Adm. Ray Griggs said in a statement.
Celebrity Couples of 2014 [PHOTOS]