Former Disney Accountant Alleges Parks and Resorts Division Fraudulently Overstated Revenue for Many Years

Matthew Soberman

The Walt Disney Company logo featuring Mickey Mouse

Former Disney Accountant Alleges Parks and Resorts Division Fraudulently Overstated Revenue for Many Years

Matthew Soberman

The Walt Disney Company logo featuring Mickey Mouse

Former Disney Accountant Alleges Parks and Resorts Division Fraudulently Overstated Revenue for Many Years

A former accountant for The Walt Disney Company is alleging that employees of Disney Parks and Resorts had “materially overstated” revenue, in a series of filings with the U.S. Securities and Exchange Comission.

walt disney company logo

The accountant, Sandra Kuba, has revealed to MarketWatch’s Francine McKenna that employees in Disney Parks and Resorts’ business division systematically reported inflated revenues by taking advantage of weaknesses in the company’s accounting software.

Kuba worked for the company for 18 years. She first noticed discrepencies in the accounts in 2013, where she claims that employees were reporting revenue for complimentary golf rounds and reporting revenue for discounted gift cards at their full value. She also claimed in her filings with the SEC that revenues were recorded twice on some gift cards: once when it was purchased and again when it was redeemed. Revenue was also recorded on gift cards that were given complimentary to guests to resolve a complaint. Kuba alleges that in just the 2008-09 financial year alone, the company may have overstated their annual revenue by as much as $6 billion.

Kuba reportedly first reported the incidents on her discovery of the software flaws in 2013, but heard no response. She then escalated her complaints with a more senior executive three years later. She claims that Disney’s corporate audit group reached out to her once in November 2016, but there was no follow-up. She then brought her claims to the SEC in August 2017. Kuba was fired from Disney a month later.

magic kingdom cinderella castle

Kuba filed a whistleblower-retaliation complaint with Department’s of Labor Occupational Safety and Health Administration. Disney claims that Kuba was fired 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.” Kuba has since withdrawn the complaint, but reserves the right to resubmit it at any time.

In more recent SEC filings, Kuba claims that Disney reported revenue from high-sales tax items like hotel rooms as lower sales-tax items like food and beverage in an attempt to take advantage of lower tax liabilites in Florida, California, and Hawaii.

In response, a Disney spokesperson told MarketWatch that “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.” The spokesperson also claimed that Kuba’s recent claim is “utterly without merit.”

Kuba has also claimed that she has spoken with officials from the SEC about the allegations, including in person, on multiple occasions, including as recently as last week. The SEC has reportedly requested additional documentation on the allegations.

We will update you as the story develops.

MORE:

Former Disney Cast Member Arrested for Stealing From Current Cast Members at Disney’s Typhoon Lagoon

Guest Removed from Walt Disney World After Punching Cast Member at The Twilight Zone Tower of Terror

Abigail Disney “Livid” with Working Conditions for Disneyland Cast Members

 

6 thoughts on “Former Disney Accountant Alleges Parks and Resorts Division Fraudulently Overstated Revenue for Many Years”

    • Likely won’t happen because there’s a ridiculous amount of corporate money at stake here. Sure, Chapek could get fired….but big whoop when there’s millions of shareholder $ involved and tons of worse things that would happen to the Disney company and us consumers down river.

  1. It should be noted the person was an analyst not an accountant. This is a very large difference in the financial world and should not be conflated as the same. For instance an analyst would have none to little experience for GAAP accounting principals. So some of the discrepancies seen could have been the lack of understanding of how GAAP works (for instance how Gift Cards work in accounting is generally confusing and difficult for any business).

  2. Sounds Like a disgruntled employee looking for a pay out. Or a corporate greed-monger looking for a tax break. Either way, who cares?

  3. Just trying to figure out what’s in it for her? I don’t see a wrongful termination lawsuit, so she’s got nothing to gain?

  4. The story of the accounting fraud by Disney is absolutely !00% true. How do I know? Because the MSM was scooped by a well-known blog on Disney, Cryo-Freezer 33, by 15 months with the exact same story, but with different informants. They name names of who is involved, and reveal exactly how the scam was done, along with giving a motive for the scam. The article basically independently verifies all the claims of fraud against Disney.
    https://cryofreezer33.blogspot.com/2018/05/exclusive-massive-accounting-fraud-at.html

Comments are closed.