Yes, the Germans did employ Human torpedo's during WWII, but not as you might think. Check out the 11 minute video below.
"In July 1944, a special unit of the German Navy codenamed K-Verband, using human torpedoes, made two large-scale attacks on Allied shipping off the Normandy beaches. One German seaman was credited with singlehandly sinking a British cruiser and received the Knight's Cross and became a celebrity. But had he actually taken out a cruiser, or had someone else achieved this incredible feat?" - Source: YouTube
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