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Although organizations are continuously making concerted efforts to harden their systems against network attacks by air-gapping critical systems, attackers continuously adapt and uncover covert channels to exfiltrate data from air-gapped systems. For instance, attackers have demonstrated the feasibility of exfiltrating data from a computer sitting in a Faraday cage by exfiltrating data using magnetic fields. Although a large body of work has recently emerged highlighting various physical covert channels, these attacks have mostly targeted open-loop cyber-physical systems where the covert channels exist on physical channels that are not being monitored by the victim. Network architectures such as fog computing push sensitive data to cyber-physical edge devices--whose physical side channels are typically monitored via state estimation. In this paper, we formalize covert data exfiltration that uses existing cyber-physical models and infrastructure of individual devices to exfiltrate data in a stealthy manner, i.e., we propose a method to circumvent cyber-physical state estimation intrusion detection techniques while exfiltrating sensitive data from the network. We propose a generalized model for encoding and decoding sensitive data within cyber-physical control loops. We evaluate our approach on a distributed IoT network that includes computation nodes residing on physical drones as well as on an industrial control system for the control of a robotic arm. Unlike prior works, we formalize the constraints of covert cyber-physical channel exfiltration in the presence of a defender performing state estimation.