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Defense-Fraud Probe Target Retires From Cubic Corp.

June 10, 1989|GREG JOHNSON | Times Staff Writer

Cubic Corp. executive Colvin C. (Sam) Wellborn, whose offices were searched by the FBI in the government's continuing investigation into defense procurement fraud, Friday retired after 32 years with Cubic.

Cubic has acknowledged that Wellborn, 56, is a target of the "Ill Wind" fraud investigation that has touched several government employees and executives at nearly 30 defense-contracting firms.

Seven federal agents took a 6-inch stack of documents from Wellborn's San Diego office after a six-hour search last June. Wellborn and several other Cubic employees since have been subpoenaed, evidently as part of an investigation into the "Top Gun" air combat training systems that account for the bulk of Cubic's Defense Department contracts.

Still Targets

Joseph J. Aronica, an assistant U. S. attorney in Virginia and one of the top prosecutors in the Ill Wind investigations, said Friday that Cubic and Wellborn remain targets of the investigation. Aronica declined to say when charges would be brought, but he described the timing of Wellborn's resignation as "very, very interesting."

Cubic spokesman Jerry Reeves declined to comment on whether Wellborn's retirement was related to the Justice Department's investigation.

Earlier this week, two Teledyne Electronics officials were given light sentences for their part in a scheme to bribe a Navy official to win a $24-million electronics contract. The two executives were the first defendants found guilty at trial in the Ill Wind investigation. So far, 14 individuals and two corporations have confessed to or been found guilty of crimes uncovered in the three-year inquiry.

Denial Made

Although Cubic Chairman Walter J. Zable has acknowledged that Wellborn is a target of the investigation, he has denied that the Justice Department considers Cubic itself to be a target.

According to Justice Department documents released by a federal court in Maryland, Wellborn allegedly paid a top Air Force civilian official for illegally obtained information that Cubic subsequently used to pursue at least three Defense Department contracts. The document alleged that Wellborn and the Air Force official engaged in "continuing criminal conduct."

In a January letter to employees, Zable argued that Wellborn "deserves respect for his service, recognition of his rights and support for the presumption of innocence with which he is clothed."

Wellborn most recently served as a Cubic Corp. senior vice president and as president of Cubic's Defense Systems subsidiary. He joined Cubic in 1957 as a design engineer. Cubic Defense Systems accounted for about 42% of Cubic's $364 million in 1988 revenue.

Service Cited

Zable on Friday credited Wellborn with "32 years of dedicated, loyal and productive service to Cubic. He will be sorely missed."

Separate from the Ill Wind investigation, two Cubic employees are now being tried in U. S. District Court on charges of defrauding the government in connection with a contract to produce hand-held mine detectors. They have pleaded not guilty. Last year, Cubic agreed to pay the Army $7.5 million to settle a civil complaint against the company in connection with the mine-detector contract.

A handful of disgruntled shareholders late last year filed a civil suit against Cubic, alleging fraudulent activity by Cubic executives and officers in connection with the defense procurement investigation and the mine detector case.

Times staff writer John Broder in Washington contributed to this story.

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