Is the freePBX traffic encrypted? How do you now if the VOIP controller is Encrypted?
What traffic are you talking about? SIP signaling can use TLS. You can encrypt RTP as well. You can even put an SSL cert if you are talking about the web gui 
I am referring to the SIP traffic. Our security guy asked if our VOIP system was encrypted.
Yeah you can absolutely encrypt SIP using TLS
https://sangomakb.atlassian.net/wiki/spaces/Phones/pages/20611555/TLS+and+SRTP