Disney whistleblower alleges company inflated revenue for years

Disney whistleblower alleges company inflated revenue for years
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A former Walt Disney Co. senior financial analyst revealed Tuesday that she has filed a series of whistleblower tips with the Securities and Exchange Commission (SEC) alleging the media and entertainment giant has overstated its revenue for years.

Sandra Kuba, who worked in Disney's accounting department for 18 years, claims that employees of its parks and resorts division routinely overstated billions of dollars in revenue through accounting software flaws.

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Kuba’s whistleblower filing reportedly alleges that Disney's revenue may have been overstated by approximately $6 billion in one year alone.

MarketWatch.com reviewed Kuba's claims, which include the recording of nonexistent revenue for complimentary golf rounds or free guest promotions. She also alleged that full-value revenue was recorded for $500 gift cards that were sold at a discount for $395, according to MarketWatch.com.

"The claims made against Disney in this matter are utterly without merit,” Disney said in a statement.

“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," Disney added.

Kuba told MarketWatch that she reported the alleged software issues to management in 2013, but didn't receive a response. She said followed up in 2016 on a more senior level, but her concerns were not properly addressed.

Kuba also said she took her concerns to the SEC in August 2017 and was fired from the company.

Kuba added that she has withdrawn her claim challenging her termination but reserves the right to resubmit it and continues to dispute Disney’s decision to fire her.

The whistleblower said she has talked with SEC officials by phone and met with them in person on more than one occasion, including as recently as last week, to discuss the allegations in her filings. The SEC has also requested additional documentation related to the allegations, based on correspondence reviewed by MarketWatch.

The Hill has reached out to the SEC for comment.

Less than a week ago, the whistleblower who exposed Bernie Madoff’s Ponzi scheme alleged that General Electric Co. had hidden at least $36 billion in losses in what he called “a bigger fraud than Enron.”

--This report was updated at 2:59 p.m.