SAN DIEGO -- Javier Arellano-Felix and another alleged member of the Arellano-Felix Organization pleaded not guilty Wednesday to federal charges including murder, racketeering, drug trafficking and money laundering.

Arellano-Felix stipulated to being held without bail during his arraignment before Magistrate Judge Jan Adler.

Manuel Arturo Villareal-Heredia deferred arguing bail until a Jan. 2 status hearing, said Assistant U.S. Attorney Laura Duffy.

At that hearing, prosecutors will ask that a 2003 indictment be dismissed and that the defendants be prosecuted under an indictment unsealed Tuesday.

One count of that seven-count indictment charges the 37-year-old Arellano-Felix and 31-year-old Villareal-Heredia with operating a continuing criminal enterprise, under which they are eligible for the death penalty.

U.S. Attorney General Alberto Gonzalez will decide at a later date whether to seek the death penalty against one or both defendants, prosecutors said.

One of Villareal-Heredia's attorneys, Kerry Steigerwalt, told reporters outside court that more than 90 percent of the crimes alleged against his client occurred in Mexico, and any prosecution, therefore, should be held in that country.

"Almost all of your witnesses are in Mexico," Steigerwalt said. "It's just horribly unfair. Absolutely, horribly unfair."

Villareal-Heredia faces almost identical charges in Mexico, which has no death penalty, Steigerwalt said.

Regarding possible Mexican witnesses for a trial in the United States, Steigerwalt said, "You can't subpoena them. You can't compel them to testify."

With extensive pretrial publicity, it is questionable whether Arellano- Felix or Villareal-Heredia can get a fair trial in San Diego, Steigerwalt told reporters.

"How can these gentlemen, at this point in time, get a fair trial?" Steigerwalt asked rhetorically.

According to the indictment, Arellano-Felix and Villareal-Heredia are members of the AFO, an alleged international criminal organization whose members and associates engage in:

the illegal trafficking of narcotics
the laundering of drug proceeds
the kidnapping, torture, and murder of informants, rival traffickers, uncooperative law enforcement, and other perceived enemies
the kidnapping of individuals for money
the "taxing" of individuals conducting criminal offenses in the areas of Tijuana and Mexicali
the systematic bribing of Mexican law enforcement and military personnel

The indictment charges that Arellano-Felix has been an AFO member since 1991 and, since March 2002, the AFO's principal organizer and top leader.

Villareal-Heredia allegedly has been an AFO member since at least 1998 and, since March 2002, one of Arellano-Felix's top six under-bosses, in command of crews that carried out enforcement operations and drug trafficking activities.

The indictment charges Arellano-Felix and/or Villareal-Heredia with several specific drug trafficking acts, including, but not limited to:

the possession with intent to distribute more than 4,000 kilograms of cocaine in 1991
the importation of about 240 kilograms of cocaine in 1995
the importation of about 908 kilograms of marijuana in 2000

The indictment also charges Arellano and/or Villareal with several specific violent acts, including but not limited to:

the murder of Fernando Gutierrez in 1996
the kidnapping of individuals in January 2002, in the spring of 2004, and in January 2005
the murder of Deputy Police Chief Hugo Gabrial Coronel Vargas in Tijuana in January 2005
the murder of Jorge Bedolla Ceron in Tijuana in February 2005
the kidnapping, murder and beheading of three Rosarito Beach police officers and one civilian last June

Arellano-Felix and Villareal-Heredia were discovered aboard a fishing vessel, the Dock Holiday, in international waters off the coast of Mexico last Aug. 14.

Arellano-Felix and his brothers, Benjamin and Eduardo, were charged in December 2003 with conducting an illegal enterprise through a pattern of racketeering activity, conspiring to import and distribute cocaine and marijuana, and money laundering.

A fourth brother, Ramon Arellano-Felix, considered the cartel's enforcer, was killed in a shootout with police in 2002. Benjamin Arellano-Felix was arrested a few weeks later.

Eduardo Arellano-Felix remains at large.

U.S. District Judge Larry Burns had set a May 15 trial date, but that was before Tuesday's unsealing of the new indictment.