Memories and thoughts are private—or at least they used to be. A new company, Veritas Scientific, is developing a technology that promises to peek into a person’s brain to reveal some of their secrets. “The last realm of privacy is your mind,” says Veritas CEO Eric Elbot. “This will invade that.”

Elbot’s device belongs in a Philip K. Dick novel: It’s a futuristic motorcycle-type helmet containing metal brush sensors that will read brain activity as images of, say, bomb specs or Osama bin Laden’s face flash quickly across the inside of the visor. Scientists have shown that familiar images prompt spikes of electrical brain activity that indicate recognition. Recognition indicates memory, and memory implies knowledge. Veritas’s goal is to create an electroencephalogram (EEG) helmet with a slideshow of images that could reliably help to identify an enemy.

But whose enemy? Veritas would provide the U.S. military with the device first, as a way to help them pick friend from foe among captured people. But Elbot imagines that the brain-spying, truth-telling technology will also be useful for law enforcement, criminal trials, and corporate takeovers. Eventually, it will even make its way into cellphone apps for civilians, he says.

“Certainly it’s a potential tool for evil,” says Elbot. “If only the government has this device, it would be extremely dangerous.”

EEG experiments on mock terrorism plots have been conducted in laboratories, identifying participants and detecting criminal details. Veritas wants to put its helmets on real suspected terrorists. According to Elbot, the U.S. military used an earlier Veritas device called BrainTruth to test the thoughts of suspected Iranian agents crossing the Mexican border into the United States.

Elbot envisions a scenario in which troops in a village in Afghanistan round up all the men and put helmets on them, and then the soldiers will able to classify them as friend or foe almost instantly. Elbot hopes to have a prototype ready for the U.S. military’s war games this fall and is pursuing a military contract...