Former Disney accountant Sandra Kuba, who worked for the Walt Disney Company for 18 years, claims Disney was inflating revenue by billions of dollars in their parks-and-resorts business.

Kuba claims Disney’s 2008-2009 financial year could have been inflated by $6 billion. Disney reported revenue of $10.6 billion in 2009.

A Disney spokesperson described Kuba’s claims as “utterly without merit.”

MarketWatch, who claims they’ve reviewed Kuba’s whistleblower filings with the SEC, detail a number of the ways Kuba claims Disney was inflating revenue by billions of dollars.

One of the main ways Disney employees were reportedly inflating revenue was by including free guest promotions and complimentary golf as revenue.

Kuba also reportedly claims Disney was manipulating gift card revenues. Instead of recording discounted gift cards that guests only paid $395 for, they would be recorded at the face value of $500. She also indicates that Disney employees would record gift card revenue twice. It would be recorded not only when guests purchased the gift card, but also when it was used to purchase items. In fact, much like the free guest promotions, if Disney gave a guest a gift card for free, it would be counted as revenue.

Kuba told MarketWatch that she brought up the discrepancies in the revenue to management in 2013. However, she claims she did not receive a response. In 2016, she would escalate her claims to a senior executive. This time she would be contacted by Disney’s corporate audit group in November, but they never followed-up after that.

After filing her SEC complaint in August 2017, Kuba indicates she was fired a month later. She would go on to file a whistleblower-retaliation complaint with the Department of Labor’s Occupational Safety and Health Administration in October 2017.

MarketWatch reports that Disney explained she was terminated because “she displayed a pattern of workplace complaints against co-workers without a reasonable basis for doing so, in a manner that was inappropriate, disruptive and in bad faith.”

In a separate filing, Kuba indicates Disney was also manipulating sales tax classifications. Disney employees were allegedly changing high sales tax items to lower tax items in order to reduce their sales tax liabilities in Florida, California, and Hawaii.

Disney’s spokesperson refuted this most recent claim as well:

“The claims presented to us by this former employee — who was terminated for cause in 2017 — have been thoroughly reviewed by the company and found to be utterly without merit; in fact, in 2018 she withdrew the claim she had filed challenging her termination. We’re not going to dignify her unsubstantiated assertions with further comment.”

Kuba confirmed to MarketWatch that she did in fact withdraw her claim challenging her termination, but reserves the right to resubmit it.

Adding to these allegations by Sandra Kuba are reports from Cosmic Book News which indicate Disney’s El Capitan Theater in Los Angeles was recording ticket sales despite no one purchasing tickets. They do note that they were “told this happened years ago, so it is unknown if the policy continues to this day.”

There were also reports by a number of fans who indicated their showings of Captain Marvel were sold out, but fans posted photos showing empty seats. (Related: New Reports of Empty Theaters at Captain Marvel Add to Movie’s Controversy)

A former SEC attorney Jordan A. Thomas told MarketWatch that the SEC appears to be taking Kuba’s allegations seriously.

“The SEC receives more than 25,000 tips, complaints and referrals each year, and the vast majority do not make it this far. The fact that the SEC has asked for more information more than once and conducted interviews suggests an inquiry is underway.”

It’s not unheard of for major companies to be investigated for accounting fraud. Famously, Mattel Inc’s Ruth Handler, the creator of Barbie, pleaded no contest after she was charged with fraud and false reporting by the SEC. Handler had previously resigned from Mattel after an investigation uncovered her wrongdoing.

(Visited 1,369 times, 1 visits today)
  • About The Author

    John F. Trent
    Founder and Editor-in-Chief

    John is the Editor-in-Chief here at Bounding Into Comics. He is a massive Washington Capitals fan, lover of history, and likes to dabble in economics and philosophy.

    Related Posts