A Navy intelligence official at the Pentagon has been indicted by a federal grand jury for allegedly running a murky scheme to illegally manufacture hundreds of unregistered firearm silencers for Navy SEALs.

Lee M. Hall, a 52-year-old civilian Navy official, was charged with conspiracy and theft of government money, the U.S. attorney’s office for the Eastern District of Virginia announced Friday. Prosecutors allege that Hall arranged a contract to bill the government $1.6 million for a batch of automatic rifle silencers that cost only $10,000 to make.

According to court documents filed by prosecutors and federal investigators, the no-bid contract was awarded to the brother of Hall’s boss in Navy intelligence at the Pentagon.

The brother, Mark Stuart Landersman, 53, a California hot-rod mechanic, was indicted on a conspiracy charge in the case in November. He has pleaded not guilty. One of his attorneys, Cary Citronberg, said Friday he had no immediate comment.

Hall was named in court papers filed by investigators last fall as a conspirator in the case, but he was not charged until Thursday, when he was indicted by the federal grand jury in U.S. District Court in Alexandria. Hall’s attorney, Danny Onorato, did not return a phone call.

The matter has been under investigation by the Naval Criminal Investigative Service for more than a year. Although many details have been sealed by a judge overseeing the case, the investigation has already taken several unusual turns.

In January, Robert C. Martinage, the Navy’s second-ranking civilian leader, resigned under pressure after investigators looking into the silencer deal stumbled across evidence that he had engaged in personal misconduct, according to Navy officials. The officials said the misconduct was unrelated to the contract. Separately, prosecutors have said in court that Martinage was not under criminal investigation.

The purpose of the silencers remains a mystery.

According to court papers, one unnamed witness told investigators that the firearm suppressors were intended for SEAL Team 6, the elite commando unit that killed Osama bin Laden. But officials with SEAL Team 6 told investigators that they were unaware of the contract and hadn’t ordered the silencers.

In January, prosecutors said in court that the silencers were acquired for a “special access program,” or a highly secretive military operation. One document filed in the case says the silencers were needed to support “the UPSTAIRS program,” but does not give details.

Hall served as an intelligence director in the office of the deputy undersecretary of the Navy. His boss was the auto mechanic’s brother: David W. Landersman, the senior director for intelligence in the Navy’s directorate for plans, policy, oversight and integration intelligence.

David Landersman has not been charged. But an affidavit filed by federal investigators refers to a co-conspirator named “David” who works for Navy intelligence. Moreover, court records state that David Landersman’s Pentagon office was searched by investigators last year.

Asked for comment, his attorney, Stephen M. Ryan, said: “I expect that my client will not ever be indicted. He has served the government honorably, in every respect.”

Ryan said David Landersman was “still a Navy employee” but declined to comment further.

Two people familiar with the case said David Landersman and Hall were placed on administrative leave from their Navy jobs last spring.

Cmdr. Tamara Lawrence, a Navy spokeswoman, said Hall was still a Navy employee but that she could not comment further on his status because of personnel privacy concerns. Speaking generally, she said an indictment can serve as a trigger to suspend a employee without pay, but the employee must be legally notified first and given an opportunity to respond.