A federal grand jury in Alexandria yesterday indicted two U.S. Forestry Service employes on a total of 129 counts of defrauding the government by filing false claims for overtime they did not work.

Harold C. Peele of 4807 Lee Hwy, in Arlington and Vickey L. Ferrell, 128 Yuma St. SE, were charged with conspiring with two unindicted employes in the alleged scheme.

According to the indictment, the 129 instances averaged about 20 hours of overtime each, which would amount to about $25,000 in alleged false claims in the Peele and Ferrell cases.

The indictments grew out of an internal investigation of falsified time and attendance sheets by the Agriculture Department and a later probe by the Justice Department, both centered on the Forestry Service's two Rosslyn offices.

A Forestry spokesman last month estimated that between $50,000 and $100,000 in false claims was involved. A spokesman said yesterday that the investigation is continuing.

According to the indictment, Peele added false overtime hours to time cards filed by Ferrell and two other employes. In return the three gave Peele a share of the overtime pay they received, the indictment said.

Peele is accused of adding 36 hours of overtime to Ferrell's time card in November 1975, for which Ferrell allegedly was paid $259.35. On Aug. 30, 1977, the indictment said, Peele added 40 hours of overtime to the time card of another employe and that employe received $328.80 in pay.

The indictment said that on 65 occasions Peele gave the Forestry Service claims for overtime he had not worked and on 64 occasions he and Ferrell gave the government such claims.

Last week Mary P. Murray, one of the two unindicted employes, was charged in a criminal complaint with receiving $230 in embezzled government property in connection with the alleged scheme, according to Assistant U.S. Attorney Leonie Brinkema.