The mysterious workings of a Pentagon office that oversees clandestine operations are unraveling in federal court, where a criminal investigation has exposed a secret weapons program entwined with allegations of a sweetheart contract, fake badges and trails of destroyed evidence.

Capping an investigation that began almost two years ago, separate trials are scheduled this month in U.S. District Court in Alexandria, Va., for a civilian Navy intelligence official and a hot-rod auto mechanic from California who prosecutors allege conspired to manufacture an untraceable batch of automatic-rifle silencers.

The exact purpose of the silencers remains hazy, but ....