A former financial analyst at the Walt Disney Co. is claiming the company regularly overstating its amusement parks revenue by billions of dollars, according to a new report.
Marketwatch reports that Sandra Kuba, who was a senior financial analyst in Disney’s revenue-operations department, alleges that employees working in the parks-and-resorts business segment systematically overstated revenue by billions of dollars by exploiting weaknesses in the company’s accounting software.
Kuba, who worked for Disney for 18 years said she has met with officials from the Securities and Exchange Commission on several occasions to discuss the allegations, according to Marketwatch. She said she brought her concerns to the SEC in August 2017 and was fired from Disney about a month later.
A Disney spokesperson told Marketwatch that the company has reviewed the whistleblower’s claims and found that they were “utterly without merit.”
Disney’s parks-and-resorts business consists of its amusement parks around the world, including the Disney World resort in Orlando and Disneyland in Anaheim.
MarketWatch said it has reviewed the whistleblower’s filings, which outline several ways employees allegedly boosted revenue, including recording fictitious revenue for complimentary golf rounds or for free guest promotions.
Another alleged act involved recording revenue for $500 gift cards at their face value even when guests paid a discounted rate of $395.
The whistleblower filing alleges that in just one financial year, from 2008 to 2009, Disney’s annual revenue could have been overstated by as much as $6 billion, according to the report.
Since leaving Disney, Kuba has reportedly made two additional whistleblower filings. The most recent tip alleges that some Disney employees reclassified guest revenue from high-sales-tax items such as hotel rooms to lower-taxed items, such as food and beverages, in order to reduce sales tax liabilities in Florida, California, and Hawaii.
Marketwatch said Kuba filed a whistleblower-retaliation complaint with the Department of Labor’s Occupational Safety and Health Administration in October 2017. Disney replied that Kuba’s employment 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.”
While the SEC receives several thousand tips a year, the vast majority of which amount to nothing, one former SEC attorney said that the government appears to be taking the complaint against Disney seriously.
“The fact that the SEC has asked for more information more than once and conducted interviews suggests an inquiry is underway,” Jordan A. Thomas, a former attorney in the SEC’s enforcement division, told Marketwatch.
Follow David Ng on Twitter @HeyItsDavidNg. Have a tip? Contact me at dng@breitbart.com
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