The phrase "sheep dipped", is commonly used in intelligence circles. It's a way of saying someone has been given an alternate identity. The best known example being Air America, but also in many other covert ops applications. Not necessarily military. "Those who were accepted got "sheep-dipped" and vanished."
Dipping a sheep gets rid of creepy crawlies. Dipping a person figuratively gets rid of details of his/her former life.
SHEEP-DIPPED - Stripping a soldier of his military uniform and identification so he can pose as a civilian during a covert mission.
Lee Harvey Oswald was "sheep dipped" in order to carry on his involvement in the CIA's clandestine activities.