Former Cubic Employee Recants Fraud Allegations

Cubic Corp. has received a letter of apology from Clifford D. Philip Jr., a disgruntled former employee who alleged last year that Cubic had defrauded the federal government through improper billing procedures, the company said Monday.

In an Oct. 13 letter to Cubic Chairman Walter Zable, Philip apologized for allegations contained in a wrongful termination suit filed against Cubic last October in San Diego Superior Court. Philip, who worked in marketing for Cubic, also agreed to a permanent injunction that prohibits him from making “disparaging (or) criticizing remarks” about his former employer.

Philip, in the lawsuit that recently was dismissed at his request, had alleged that Cubic “improperly and fraudulently” charged federal defense agencies for work done for foreign governments. Philip joined Cubic in 1984 and left the company in early 1986, according to his attorney, Brian D. Miller. Philip was not available for comment on Monday.

The suit filed in October, 1986, demanded $750,000 in lost wages and $5 million in punitive damages. At the time, Philip was characterized by his attorney, Brian D. Miller, as a “whistle blower” who was fired after bringing alleged improprieties to the attention of superiors.

Alleged Cover-Up

Miller also complained that Cubic was trying to cover its trail by classifying run-of-the-mill documents as “top secret.”

In the letter to Zable, Philip acknowledged that his information about allegedly fraudulent expense accounting was “not complete and therefore my interpretation of (the allegedly fraudulent expenses) appears to have been incorrect.”

He also apologized for “statements made on my behalf by my attorney.” Miller, who no longer represents Philip, on Monday declined to comment on the case.

However, Cubic’s general counsel, William Stewart, said Monday that Cubic earlier this month filed a lawsuit against Miller in San Diego Superior Court for malicious prosecution and libel. Cubic is trying to negotiate a settlement with Miller, according to Stewart. The company had filed similar allegations against Philip, but withdrew them after he recanted, Stewart said.

Cleared of Wrongdoing

Cubic was cleared of any wrongdoing in an investigation by the U.S. attorney that was spurred by Philip’s initial lawsuit, Stewart said.

“We gave them our complete cooperation and they concluded there was no wrongdoing of any kind,” Stewart said.