When Joseph Peneueta was gunned down in Chinatown a week ago today, it marked the second time in two years that deadly violence from California's illicit drug trade spilled over onto Honolulu's streets, according to law enforcement officials.

Peneueta's shooting was the result of a dispute among business partners, police believe.

At the time of the shooting, Peneueta and the two men accused of killing him — Iosefa M. Pasene, 21, and Zorro R. Rye, 24 — were the subject of a U.S. Drug Enforcement Administration investigation into allegations that they smuggled cocaine and crack into Honolulu from the San Francisco Bay Area. All three have prior county and federal drug convictions and hail from San Francisco.

Pasene and Rye were indicted Thursday on charges of murdering the 35-year-old Peneueta at 4:10 a.m. on March 28 near the intersection of River and Pauahi streets.

Armed with an AK-47 and a shotgun, Pasene and Rye gunned down Peneueta after Peneueta "dissed" the two, according to police. After the attack, the assailants drove away and Peneueta was left lying in the street under the glow of streetlights as onlookers gathered nearby.

Police recovered 14 shell casings from a rifle and four spent shotgun casings at the scene.

"This incident illustrates why we need strong drug laws and punishment of those seeking to profit by trafficking," said Honolulu Police Chief Boisse P. Correa. "It is a dangerous undertaking, not only for those involved but for law enforcement and the entire community."

Pasene and Rye are being held without bail because they pose a "significant threat to the public and community," according to prosecutors.

DRUG GANG

All three men were members of the Chinatown drug gang known as the "Friscos," coined after their San Francisco roots, but they began to argue recently after business went bad, law enforcement officials say.

Pasene was arrested the evening before the shooting on suspicion of third-degree promotion of a dangerous drug. But he was released after he and another man posted bail. At the time of the shooting, Rye was also free on bail pending sentencing for first-degree promotion of a dangerous drug, court records show.

Two days after the killing, Pasene was picked up on a federal arrest warrant by DEA agents and Honolulu police. The DEA investigation is open and ongoing.

The shooting, which occurred in the middle of a Downtown street, was reminiscent of the execution-style killing of Benjamin Grajeda in May 2007.

Grajeda, an alleged drug dealer from North Hollywood, Calif., ran afoul of a group of Maui drug dealers originally from Alabama and was kidnapped and then gunned down in the middle of Kane'ohe Bay Drive when he tried to get away.

"Rival drug gang members shooting each other in the street is not something we usually see in Hawai'i. You typically see shootings like this in larger, urban areas on the Mainland," said FBI Special Agent Brandon Simpson.

"This office will continue to work with our federal and local law-enforcement partners to monitor Mainland and local drug trafficking organizations and ensure that their feuds don't end up on our streets."

KANE'OHE SHOOTING

The Grajeda incident began when Grajeda was allegedly kidnapped by three men who forced their way into his Pu'uohala'i Place apartment.

The group intended to rob Grajeda of cash and drugs, police said. Grajeda was placed in the trunk of a car but managed to escape.

After the shooting, police staged an islandwide manhunt and arrested Jerrico Dewon "Rick" Lindsey and William Freeman in Hale'iwa. Reginald "Red" Pettway was allegedly with them but eluded arrest and returned to Alabama.

Lindsey, 28, the accused shooter, is charged with second-degree murder, first-degree burglary, first-degree robbery, kidnapping, first-degree terroristic threatening and four firearm offenses. His trial is pending.

Freeman, who told police he drove the getaway car, was to be tried on charges of kidnapping and hindering prosecution.

Melissa Ordonez, 22, also known as Rihanna Joy Valentino, allegedly set up the drug-related heist, police have said.

Ordonez told the other suspects that Grajeda had a large amount of drugs and money at the apartment, but none was found, police said. She was charged with being an accomplice to first-degree burglary, first-degree robbery and kidnapping.