10 Percenter

09.12.14 9:55 AM ET

The Navy SEAL Who Swindled His Brothers

How did a man who made it into the elite SEALs and lived lavishly while running his own money-lending firm end up homeless near an offramp? It may have been the $1 million he stole.

Navy SEALs divide their own into two groups. As they see it, there are the good mugs you can count on, and then there are the 10 percenters, the minority who slip through the screening process and bring disgrace on everyone else. Jason Mullaney might have started off in the first category, but after conning 11 fellow SEALs out of more than $1 million, he’s decidedly in the second.

When police caught up with Mullaney in 2012, he’d run through the money he bilked from his friends and the last of his own. After making it onto the SEAL teams and enjoying a lavish lifestyle after he got out, he was found near a freeway offramp, homeless.

In a San Diego County courtroom Monday, Mullaney, 42, pleaded guilty to grand theft and fraud in a trial that had dragged on for two years. He’s scheduled to be sentenced on October 7 by Superior Court Judge Frederick Maguire and could face nearly 13 years in prison, according to a Fox News affiliate that covered the trial in San Diego. Not so bad compared to the 34 years he could have received if he’d been convicted on all the charges he originally faced.

Mullaney joined the SEALs in 1993, said Don Shipley, a former SEAL who maintains access to the Navy’s training database. After making it through the rigorous six-month Basic Underwater Demolition/SEAL (BUD/S) course in Coronado, California, famous for its grueling “hell week,” and completing the 26-week SEAL Qualification Training program, Mullaney officially entered the teams.

Shipley, who has gained notoriety for exposing phony Navy SEALs online, said that after completing his training Mullaney was assigned to SEAL Team 5 and likely served in some overseas assignments, though his deployment record couldn’t be confirmed. At one point Mullaney returned to Coronado and served as a BUD/S instructor training junior SEALs.

The Daily Beast couldn’t confirm when Mullaney left the military or under what terms, but he was in good enough standing within the SEAL community to attract fellow veterans when he started a new business venture.

In January 2008, Mullaney formed Trident Financial Holdings & Acquisitions, LLC. The name evoked his elite military background, trading on the SEALs’ trident symbol for a money-lending business.

The investment proposal was simple. Mullaney convinced friends to give him their money and promised them a 24 percent return. He said he would be lending to risky investors, presumably people willing to pay a high premium because they were hard up for a loan, and collecting collateral to ensure they paid.

That pitch brought in 11 former SEALs and one family friend, Andrew Geiger, who had dated Mullaney’s sister. But the profits never materialized. During the trial, KNSD-TV reported, a police officer who worked on Mullaney’s arrest testified that “Geiger gave him $50,000” and “claims he received nothing in return.”

For the 11 fellow SEALs who also trusted their money with Mullaney, it was a similar outcome. When a former SEAL who invested $40,000 went to collect, Mullaney couldn’t come up with the cash but offered him a handgun as payment.

While Mullaney wasn’t paying what he owed on the investments, he seemed to be living well, former SEALs told an investigator involved in the case. In testimony, witnesses described a lifestyle that included “a downtown loft and several luxury cars.”

One witness at the trial, Steven Elias, a SEAL veteran who spent 32 years on active duty in the teams, testified that Mullaney “made frequent trips to Las Vegas and once lost $70,000 while gambling.”

“The SEALs thought they were investing money, but in reality, Mr. Mullaney was simply spending their money for his own purposes,” said Deputy District Attorney Hector Jimenez, the prosecutor in the case. The end result was that Mullaney “lost all their money.”

The Mullaney case is the latest bit of bad press to dent the larger-than-life space SEALs occupy in the public imagination. First Jesse Ventura won a defamation lawsuit against the widow of Chris Kyle, a SEAL who claimed he’d decked “The Body” after the former governor and SEAL disparaged the teams. Then, just last week, Ohio police accused a former SEAL of lying about being shot by three black men after a verbal altercation.

It doesn't take much to be shown the door by the special operations community. One perceived integrity lapse might be enough. It used to be that just writing a book about your experiences could get you excommunicated. Now Mullaney is paying for his mistakes behind bars. He’s got at least six years to worry about forgiveness.