Two cousins pleaded not guilty Wednesday in federal court to drug charges stemming from the seizure of an estimated $1.6 million in methamphetamine on Kauai.

Steve Pete Orozco II and Andrew J. Martinez, clad in white jumpsuits with their wrists shackled, appeared at their arraignment in federal court in Honolulu on charges of drug conspiracy and of methamphetamine distribution. Orozco is also charged with possession of a stolen semi-automatic handgun and about 50 rounds of 9 mm ammunition.

Trial for both men is set for July 12.

U.S. Magistrate Judge Richard Puglisi allowed Martinez, 24, of Hanamaulu to be released to a halfway house with curfew restrictions from the Honolulu Federal Detention Center. Orozco, 28, of Stockton, Calif., remains at the detention center.

A federal grand jury indicted Orozco and Martinez on May 11.

At 12:46 a.m. March 8, Kauai police arrested Orozco and Martinez at a Walmart parking lot after a drug deal where an informant bought 85.8 grams of methamphetamine, police said.

Later that day, officers executed a search warrant at Martinez’s Laukona Street home, where they recovered nine gallon-size plastic bags containing about 7.3 pounds of methamphetamine, police said.

Kauai Police Chief Darryl Perry has said it was the largest seizure by the Kauai Police Department in a “single incident.” Police estimated that the drugs had a street value of $1.6 million.

Police also recovered from Martinez’s home other illegal drugs, about $2,400 in cash and a Glock 19, a semi-automatic 9 mm handgun with its serial number scratched off. Officers also seized $3,000 from a Nissan pickup truck driven by Orozco.

Martinez moved to Kauai with his girlfriend in 2006. At the time of his arrest, Martinez told authorities Orozco, his first cousin, moved in with them a few weeks earlier when Orozco “brought a shoebox filled with four to five gallon- sized, Ziploc-type bags containing crystal methamphetamine,” according to a court document.