UNITE - Three men arrested in June following an undercover investigation into cocaine trafficking in Perry County now face federal drug conspiracy charges.

Jose M. Canales-Escobar, Arnie J. Lewis and Bill M. Stewart were arrested Thursday, August 14, by Operation UNITE on federal warrants signed by U.S. Magistrate Judge Robert E. Wier.

All three are charged with conspiring to knowingly or intentionally possess with intent to distribute cocaine and with possessing with intent to distribute cocaine between May 25 and June 16, 2008. In addition, Escobar and Lewis face a federal charge of carrying or use of a firearm during and in relation to a drug trafficking crime.

Escobar may also face additional charges for being an undocumented alien.

On June 17, UNITE detectives and officers from the Hazard Police Department, Perry County Sheriff’s Office and Kentucky State Police K-9 unit arrested Escobar, age 29, of Pinehurst Drive, Smyrna, Georgia, and Lewis, age 51, of South Highway 27, Carrollton, Georgia, after they sold approximately 12 ounces of cocaine during an undercover drug transaction in a Hazard shopping center parking lot.

During the arrest officers discovered a loaded handgun on the front floorboard of their 2007 Chrysler 300-C along with $1,000 in counterfeit $100 bills.

A day earlier Stewart, age 68, of Middle Ridge Road in Bonnyman, was charged with one count each of first-degree trafficking in a controlled substance and second-degree possession of a controlled substance after police received complaints that Stewart was selling cocaine from a Hazard hotel room.

During a search of Stewart’s room officers found approximately one-quarter ounce of cocaine, $518 in cash, and various equipment used to prepare cocaine for sale.

All three men will be taken to the Laurel County Detention Center to await a hearing in U.S. District Court for the Eastern District of Kentucky.