SALEM – Bail for a Lynn man caught with over one-half kilo of heroin and one-quarter kilo of cocaine in a Varnum Street apartment was set at $40,000 cash bail.Jose Negron, 41, with addresses at 144 South St., and 8 Varnum St., entered his plea of not guilty Wednesday at his arraignment in Salem Superior Court.He is charged with trafficking over 200 grams of cocaine, trafficking over 200 grams of heroin and trafficking over 28 grams of cocaine, crimes that will net him a mandatory minimum total of 35 years in state prison.In the meantime, he remains in custody at the Middleton Jail awaiting trial.Assistant District Attorney Jean M. Curran asked for a $100,000 cash bail, pointing out to Judge David A. Lowy the amounts of narcotics involved.She said the investigation began in November when police were provided the name of a person providing narcotics in the Lynn area through a confidential informant.The witness told authorities the man drove a Volvo station wagon, was Spanish, and always had narcotics with him for customers. He provided police with a license plate number, which was traced to Negron and registered to a residence on Nelson Street.A control buy was arranged between Negron and the witness, but authorities watching were not able to actually see the transaction because of the tinted windows, Curran said.Police then set up surveillance and observed Negron going and coming from a residence at 8 Varnum St.On Jan. 25 around 11:30 a.m., police stopped Negron in City Hall Square area and found, with the assistance of a canine, a hidden compartment in the vehicle which contained about 50 grams of cocaine.Police then executed a search of the third-floor apartment at 8 Varnum St., and seized over 250 grams of cocaine and one-half kilo of heroin, over 500 grams, hidden in ceiling tiles.But defense lawyer Lawrence M. Perlmutter insists that police never had probable cause to stop Negron’s vehicle in the first place, nor did they have probable cause to search Varnum Street – issues, he said, will be argued at a later date.He told Judge David A. Lowy that his client cleans cars in Revere, has one child and no record as he asked for a more reasonable bail of $5,000 cash.Lowy felt the nature and circumstances of the case as well as the potential punishment Negron is facing warrants a $40,000 cash bail.Negron is due back in court on April 25 for a pretrial conference.