Sandy Kuba was born in El Mira, New York, to a father who owned a landscaping business and a mother who worked in a factory during World War II and later as a homemaker. Kuba’s father died when she was three. Her mother received a diagnosis of Multiple Sclerosis when Kuba was nine years old. Kuba is the youngest of six children.
Kuba attended El Mira Free Academy and El Mira College, working at the American Heart Association as a controller and later deciding to do public accounting. After receiving an accounting degree at El Mira, Kuba worked at Deloitte & Touche, getting her Certified Public Accounting certification in 1987. In 1988, Kuba moved to Jacksonville and was a Regional Senior Auditor at a firm. In December of 1990, Kuba got married and left public accounting, and moved to Los Angeles, where she was employed at a Beverly Hills law firm. In 1995, she worked at Belkin Components and in 1998 at Orange County National Golf in Winter Garden, Florida. In 1999, Kuba was hired to be an Analyst at The Disney Company.
Around 2013, Kuba was doing well on her career path at Disney. People were seeking her out as she was an expert in Disney coding and accounting flow. She had become a Senior Analyst in Disney’s revenue-operations department, with her performance reports being excellent and showing positive ratings until 2016. These ratings showed Kuba “Right on Track and Moving Ahead” from 2013 to 2016. During 2013-2016, Kuba was noticing some revenue recognition issues and reported them to management. No one responded to her concerns. This happened during her final years of employment at Disney (2016 and 2017). Kuba stated that she noticed anomalies in the Disney software equipment that she eventually tracked down. Kuba found that Disney was able to receive approximately three billion dollars per year of false revenue. Two billion dollars of the false annual revenue consisted of coupon and gift card fraud, which distorted Disney’s financial reports.
Kuba saw that Disney recognized revenue twice with coupons, which were typically included in Disney customer packages. Kuba alleged that Disney recognized revenue when coupons were purchased and then again when the coupons were used. With Disney gift cards, Kuba alleged that Disney would recognize “free” gift cards, or coupons for activities such as free rounds of golf, as an expense in their bookkeeping. Still, Disney would allegedly recognize the use of free gift cards or coupons as revenue when they were given for free to the guests as promotions or guest inconvenience.
Recording free gift cards or coupons as revenue provided a false gross profit margin to investors.
Kuba also alleged that another billion dollars of fictitious revenue was gained when Disney recorded customer deposits from early booking to current revenue rather than as a liability until the customer paid in full during the year of their trip. Disney also allegedly failed to pay proper state sales taxes that it collected from consumers by showing purchases under a different category, which had no sales tax or a reduced sales tax, such as food and beverage, thus significantly underpaying sales taxes and property taxes to states, and again fictitiously raising the revenue shown to investors.
The software used at Disney, with which Kuba was familiar and the accounting procedures contained flaws, which Kuba found, allowed Disney financials challenging to trace, thus distorting its financial records to the investors’ detriment. It took Kuba a lengthy period to figure out how the revenue recognition issues were being done. She had to figure out how weaknesses in the company’s accounting software were being manipulated to overstate revenue. Kuba brought up these issues to management, and no one at Disney investigated them. No one sought or requested back-up or support from her or her team regarding any of her claims. Kuba even brought the revenue recognition issues to the President of Walt Disney at the time (George Kalogridis). Still, Kuba said, “he blew her off.” Other employees at Disney were aware of the manipulation of revenue. Kuba stated their response to the possibility of reporting it was they “did not want to lose their job.”
Kuba was shocked that no auditors or accountants at Disney followed up on her presentation to management that revenue was being manipulated. The only engagement Kuba had with corporate management was through the Employee Relations Department, who castigated Kuba for sending emails to other Disney personnel complaining about the financial distortions.
On June 19, 2017, the day after her final attempts at internal whistleblowing, Kuba was threatened not to report her concerns elsewhere, or Disney would consider it “retaliation against the company.” Kuba then contacted the U.S. Securities and Exchange Commission (SEC) on the first of August 2017 to advise them of manipulation of revenue at Disney. The SEC contacted Kuba about additional information. Later, Kuba was brought in by management, who advised they had looked at her allegations. They said they were not made “in good faith.” Kuba knew that management was aware of her whistleblowing. Disney terminated Kuba in September of 2017 for “cause” due to the emails she sent to Disney personnel complaining about financial distortions. Disney advised the emails were disruptive and in bad faith.
Kuba does not feel that she was terminated for proper cause, but in fact, terminated due to both her internal whistleblowing and her SEC whistleblower tip.
After holding a position at Disney for over 18 years and becoming a Senior Financial Analyst responsible for a group of 10 accountants, Kuba felt that her internal complaints to management, including the President of Disney, were being ignored to the detriment of Disney investors and taxpayers. Kuba contacted the SEC in August of 2017 and, having retaining counsel, filed another SEC whistleblower tip in June of 2019. The SEC met with Kuba in person and had many follow-up conversations with Kuba. Kuba says that she is currently cooperating with the SEC and stated that “It is unfortunate that when I attempted to raise the issues internally that Disney, ignored my pleas for an investigation, failed to take any action and instead terminated me and made statements vanishing my stellar and unblemished career with them of 18 years.”
Kuba was asked why she was the one who stepped up to report wrongdoing on the part of a large corporation, while many had not. She responded that her “mother believed in being very honest.” Her mother told Kuba a story about being a nurse’s aide at a Catholic Hospital under the guidance of Catholic nuns. The person in charge was a nun whom everyone feared for her temper. One day, Kuba’s mother dropped a load of dishes, and they broke. The other aides told her not to say anything to the Reverend Mother, who was a figure to be feared at the hospital and had issues with anyone lying or hiding things from her.
Kuba’s mother did tell and was surprised when the nun responded, “That is too bad, dear.” Kuba’s mother learned and passed on to her daughter that it is not the act that is bad, but the cover-up. Doing the right thing and being honest about it were extremely important lessons passed on from mother to daughter.
“Walt Disney himself would be rolling over in his grave hearing how his once family-friendly company is treating this former longtime Disney employee who simply sought to do the right thing. Shameful,” said Kuba’s attorney, Stuart Meisnner.
Disney released a statement calling Kuba’s allegations were “utterly without merit.”
No one desires to be a whistleblower when they are growing up. They do not weigh the costs or benefits of blowing the whistle. Whistleblowers do it because they have a commitment to their moral principles, and they are able to resist the pressure social influence exerts or manipulation by others. Sandy Kuba was able and willing to blow the whistle on the Disney Company. Unfortunately, the pressure became too much for her husband of almost thirty years, Robert “Bob” Kuba, who shot himself at the age of 64 on March 9, 2020, and died. Currently, Sandra Kuba is waiting for justice with her autistic son, Robert.
Although Kuba has faced many trials and tribulations in her life, including losing her career and husband, she has no regrets in bringing the truth into the light and sincerely believes that the truth will prevail.
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