Navy Region Southwest commander Rear Adm. Bette Bolivar announced Tuesday the dismissal of charges against Lt. Jason Webb, Chief Petty Officers David Swarts and Xavier Silva, and Petty Officer 1st Class Daniel D'Ambrosio.
"Military prosecutors informed Admiral Bolivar that the evidence from the 2012 case has degraded to the point where they believe obtaining convictions is no longer likely," a Navy statement said.
Swarts' defense attorney Colby Vokey told The San Diego Union-Tribune the dismissal was long overdue.
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"The case should have never been brought," he said. "It was rife with unlawful command influence and overreach in prosecution."
The development comes amid turmoil in the Navy after a failed prosecution of another case involving SEALs.
Last month, a military jury acquitted Special Operations Chief Edward Gallagher of murder and attempted murder charges involving the death of a wounded prisoner in Iraq in 2017. He was found guilty only of posing for a picture with the corpse.
The Navy then dropped charges against Gallagher's platoon leader, Lt. Jacob Portier, who was accused of dereliction of duty, destruction of evidence and conduct unbecoming an officer for holding Gallagher's re-enlistment ceremony next to the body.
Before Gallagher's trial, the lead prosecutor was removed from the case and admonished for taking part in an effort that used software to track emails sent to the defense team in order to find leaks to news media. A judge said it violated Gallagher's constitutional rights.
The Navy's Region Legal Service Office commander was replaced Monday and on Tuesday the new commander removed that prosecutor from his position as the region's senior trial counsel, the Union-Tribune reported.
In addition, the Navy's top SEAL set Aug. 7 as a deadline for commanders to set a plan to deal with problems in the SEAL community. Rear Adm. Collin Green said in a July 25 letter that there had been failures to maintain good order and discipline.
A telephone message asking whether those plans had been delivered was left with the Naval Special Warfare headquarters public affairs office in San Diego.