Iverson was not present, not charged and "was not implicated in any drug activity," police spokesman Larry Hill said. But authorities have filed papers to take possession of his car, a new Mercedes Benz coupe.

The Philadelphia 76ers guard had given the two men -- both long-time acquaintances -- permission to use the car, Hill said.

Andre Steele, 27, and Michael Powell, 29, were stopped at 2 p.m. Friday after police received complaints about drug dealing in a Norfolk neighborhood.

Powell was arrested and charged with possession of cocaine with intent to distribute, a felony. Steele was charged with possession of marijuana.

Under Virginia law, cars used in drug activity may be confiscated permanently.

Iverson was not immediately available for comment Monday. Dave Coskey, a spokesman for the 76ers, said he could not comment on matters involving players because of the NBA lockout.

Iverson has known Steele and Powell for several years. In September 1996, Powell was in Iverson's old Mercedes when shots were fired at the car, according to a Hampton police report. Powell was convicted of cocaine possession in 1990 and received a suspended sentence.

Steele has accompanied Iverson often at public appearances, including court hearings.

On Friday, residents called police and reported seeing the Mercedes pull alongside a BMW and drugs being dealt, Hill said.

"Immediately following the transaction, the investigators stopped both vehicles and it was determined that in Iverson's vehicle there was some crack cocaine which belonged to Michael Powell," Hill said.

The man in the BMW, Nathaniel Motely, 29, was charged with possession of marijuana and carrying a concealed weapon, both misdemeanors. It was not known whether he knows Iverson.

Powell was released on $5,000 bond. Steele and Motely were charged and released on their own recognizance.

This is the most recent of several scrapes Iverson and his acquaintances have had with the law:

--On Aug. 3, 1997, Iverson was a passenger in a car stopped for speeding near Richmond. The trooper smelled marijuana and searched the car. He found a .45-caliber pistol on the floorboard. Iverson pleaded no contest to the gun charge, and a marijuana possession charge was dropped. He was sentenced to probation. The NBA suspended Iverson for one game.

--In May 1997, Iverson testified on behalf a man he calls "dad." The man, three-time felon Michael Andre Freeman, was convicted of possession of cocaine with intent to distribute.

--In August 1993, Iverson was convicted for his role in a Hampton bowling alley brawl. He was sentenced to five years in prison. Then-Gov. L. Douglas Wilder granted him clemency in December 1993.