A former British Army soldier at the center of explosive claims that members of the British military murdered Princess Diana is a recently released convict, once questioned in the 2004 death of an Iraqi civilian.

The former member of the elite special forces unit SAS was released from the Military Corrective Training Center in Colchester last month, after he was convicted of illegal possession of firearms. Known only as Soldier N in court and subsequent press reports, he was convicted of bringing back weapons to the U.K. from combat in Iraq and Afghanistan and hiding them at his home. He was discharged by the army after his release.

Military sources confirm that the former soldier was one of a number of servicemen interviewed about the death of a civilian in Iraq at the height of the sectarian violence in 2004. British authorities are currently reexamining the case. No charges were filed in this matter.

Members of his family raised a red flag with the military in September 2011 after Soldier N returned from combat in Afghanistan, telling his SAS commanding officer that he suffered from flashbacks and had begun to behave erratically. His in-laws at the time sent a letter claiming that he had been driving his children around in the boot of a Land Rover. They also said that he felt threatened by those around him and on one occasion had hidden from a motorcycle, fearing “someone was after him.” This letter, which emerged during the court martial of a former friend in Wiltshire, also contained the allegations about Diana’s death.

Nicola Hudson, from the Combat Stress organization, said such behavior could suggest that Soldier N was suffering from posttraumatic stress disorder. “Flashbacks, nightmares and isolation are among a range of things that can affect veterans [and] can be triggered by a sound [or] a smell; something that transports the veteran back,” she said. “Other symptoms include hyper-arousal, where you don’t feel safe walking down the street, or paranoia.”

The claim that Diana didn’t die in a car accident but in an assassination, and that her murder was covered up by the British establishment, raced around the world this weekend before the background of the ex-SAS officer began to emerge. Senior defense officials have told The Daily Beast that the claims allegedly made by the former member of the elite SAS squadron were not originally considered worthy of investigation.

“It’s not for us to say whether there is any truth to the allegations, but you can be sure there would have been a thorough investigation in 2011, if it was felt there was any reason to believe what this man was saying,” a Ministry of Defense official told The Daily Beast.

In 2011, police searched Soldier N’s home in Hereford, close to SAS headquarters, finding two 9mm guns, a silencer, ammunition, smoke grenades, and a high-explosive hand grenade. Soldier N was found guilty of possessing illegal firearms and was sentenced to two years in prison.

Robert Jobson, co-author of Diana: Closely Guarded Secret, said it was clear that Soldier N should never have been a member of the SAS to begin with. “Bonkers solider gets into the SAS, then disgraces the Regiment and his comrades,” he wrote on Twitter.

Claims that Soldier N had boasted that the SAS had assassinated Diana and successfully covered it up were contained in a seven-page handwritten letter sent by the parents of his ex-wife to his boss. According to military officials, the allegations were not taken seriously until the letter was referred to during the court martial of Danny Nightingale, which was held in Britain this month. It was introduced in court when Soldier N gave evidence against his former SAS colleague, saying that he had also stored illegal weapons in the house they shared.

Police officially announced on Saturday night that they would be “scoping” the evidence to assess whether their exhaustive Diana probe should be reopened.

“I’m sorry to be a spoilsport,” a source close to the original investigation told me. “I’ve seen what this soldier is supposed to have said but there is only one explanation for Diana’s death. I don’t see how it could have been anything but an accident.”