A Watsonville man was arrested yesterday on suspicion of possessing drugs for sale and counterfeit money. Following a two-month investigation, law enforcement served a search warrant at the home of 34-year-old Jesus Melgoza on the 300 block of East Lake Avenue. Officers recovered bindles of heroin, opiate painkillers, counterfeit U.S. currency, and nearly $5,000 in cash. E.A. Hall Middle School was briefly locked down while the search was conducted.