RICHMOND, Va. -- A man sought as a material witness in the Washington-area sniper shootings was arrested Saturday, and prosecutors announced plans to charge the two suspects in Virginia, the second state where 17-year-old John Lee Malvo could face the death penalty.

Virginia prosecutors will charge the men Monday to cover one killing and one wounding there, said William Neely, Spotsylvania County, Va., Commonwealth's Attorney.

Death for teenager

Neely said he will seek the death penalty for John Allen Muhammad, 41. Malvo could face death, but Neely said his sentence would depend on his role in the shootings.

Virginia and Alabama -- where the pair are charged with killing a woman outside a liquor store in September -- allow the death penalty for crimes committed at age 17.

Neely said Virginia prosecutors have been rushing to file charges to discourage federal authorities from filing their own.

"We're having to go in in a hurry becuase we don't want to be supplanted by the feds," Neely said. "The ball is in their court. They have physical custody."

Justice Department officials were still deciding whether to bring their own charges.

One official, speaking on condition of anonymity, said federal prosecutors could use the Hobbs Act, which allows the government to seek the death penalty in murders where killers try to extort money. Letters left behind demanded $10 million.

Authorities in Maryland were the first to file charges Friday, covering the six deaths in their area. They said they would seek the death penalty against Muhammad; Malvo would be tried as an adult, but the death penalty could not be applied there if his reported age of 17 is verified.

On Saturday, a third man, believed to be the co-owner of a blue Chevrolet Caprice the suspects were found in a day earlier, was arrested and held as a material witness.

Nathaniel O. Osbourne, a man of Jamaican descent who has lived in Camden, N.J., was arrested at a home in Flint, Mich. He was to appear in court today but was not considered a suspect in the shootings, FBI Agent Barry Maddox said.

According to the New Jersey Department of Transportation, Muhammad and Osbourne bought the blue Caprice from Sure Shot Auto Sales Inc. in Trenton on Sept. 10.

Authorities say a hole cut in the car's trunk could have allowed a sniper to fire at unsuspecting victims from the concealment of the car's interior, leaving no evidence.

With suspects in custody, communities terrorized by the shooting spree gleefully welcomed the end of school lockdowns and cancellations of outdoor events.

"The kids are loving it. They've been going crazy locked up," Vicki Edwards said as she watched her 9-year-old daughter's soccer game, which had been canceled the previous two weekends.

"Once they announced the charges, that's when I really started to relax," said Mark Rogers, a retired police officer whose daughter couldn't wait to get back on a soccer field in Rockville. "After that, we could all kind of let our hair down and get back to life."

The last of the sniper's victims, bus driver Conrad Johnson, was mourned Saturday at a service in Silver Spring, where two dozen buses carrying transit workers joined the funeral procession.

The 35-year-old father of two, gunned down Tuesday as he prepared to start his route, was the 10th person killed in the attacks in Maryland, Virginia and Washington, D.C. Three other people, including a 13-year-old boy, were critically wounded.

According to the FBI, police in Baltimore had spoken with Muhammad on Oct. 8, during the shooting spree, after finding him asleep in the car. Muhammad told the officer he was traveling and police, looking for a white van, did not detain him.

The New York Times reported Saturday there were two other times when the pair were pulled over and then released. The Washington Post said authorities had spotted the Caprice and recorded its New Jersey license plate number at least 10 times but had no reason to link it to the sniper attacks until this past week.

Authorities had been tipped off last summer that Muhammad might be dangerous. Law enforcement officials said the FBI in Washington state interviewed a witness who claimed Muhammad tried to obtain a silencer for his gun and spoke of killing police.

FBI agents and local police had concerns about some aspects of the witness's account and decided to treat the threat as a local issue of officer safety, the officials told The Associated Press. They said there was nothing to suggest Muhammad might go on a killing rampage.