Updated

A man sought for questioning in the Beltway Sniper case was arrested without incident at a home in Flint, Mich., Saturday, and prosecutors said they planned to charge the sniper suspects in Virginia, where 17-year-old John Lee Malvo could face the death penalty.

Nathaniel O. Osbourne, 26, co-owned the blue Chevy Caprice that police took into their possession when they arrested John Muhammad, 41, and John Lee Malvo, 17, Thursday morning in connection with the case. The two men were arrested after police found them sleeping in the vehicle at a rest stop along I-70 near Frederick, Md.

Video: Update on Sniper Case

Police say Osbourne, a man of Jamaican descent who has lived in Camden, N.J., is not a suspect but may be a material witness. He apparently was with Muhammad when the sniper suspect bought his Caprice at a car dealership called Sure Shot Auto Sales in Trenton, N.J. The car dealer said Muhammad showed the dealer a District of Columbia driver's license and said that he wanted to buy the car for his teenage son. The dealer also described Muhammad to police as being very abrupt and tense.

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

Osbourne is scheduled to appear in federal court in Flint Sunday.

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

Neely said he will be seeking the death penalty for Muhammad. 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 people who commit crimes at age 17.

Neely said Virginia prosecutors have been rushing to file charges before federal authorities file their own.

"We're having to go in a hurry because 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 are still considering 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.

Montgomery County State's Attorney Douglas Gansler said Saturday he hopes to continue discussions with other prosecutors about where the suspects will be tried first.

"My understanding is that it will be resolved this week," he said, but added that no meetings were scheduled.

With suspects in custody, communities frightened by the shooting spree happily 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.

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.

The Associated Press contributed to this report.