The owner of a Bellport grocery and two of his employees were indicted Tuesday on federal charges of defrauding the food stamp program.

Santiago Ramirez, of Oceanside, owner of Hermanos Martinez Grocery on Montauk Highway, was part of a scheme that defrauded taxpayers of more than $500,000, Assistant U.S. Attorney Richard Lunger said at the arraignment of Ramirez in federal court in Central Islip.

Magistrate William Wall ordered Ramirez, 55, held without bail after defense attorney Robert Race said he needed time to discuss how much collateral the defendant's family could raise so he could suggest a "reasonable" bail. Race entered a plea of not guilty on behalf of Ramirez.

Officials had announced the arrest of the two employees, brothers Adelso Martinez, 22, and Juan Anuery Salce-Martinez, 19, in April. They are free on $100,000 bond.

Lunger said after the brothers' arrest in April that clerks converted to cash part of the funds from government-issued debit cards that were supposed to be used to purchase food. The clerks kept half of the cash and gave the customers the other half.

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Recipients of the federal food stamp program receive a type of debit card known as an EBT, or electronic benefits transfer card, court papers say.

In a typical example of the alleged scheme, a customer's EBT card was debited for $114.48. But the customer received only $14.48 in food; $100 in cash was split between the customer and the store, the court papers say.

In court papers, Lisa Barretti, an agent with the Agriculture Department's inspector general, said that the grocery redeemed an average of $43,000 in SNAP benefits each month. Other similarly sized grocery stores in the Bellport area redeem between $600 and $2,700 in benefits per month. A large grocery store redeems about $8,400 in benefits per month, the papers say.