Freddie Mac Exec Found Dead At Home

This undated photo provided by Freddie Mac shows David Kellermann, the acting chief financial officer of mortgage giant Freddie Mac. Kellermann was found dead at his home Wednesday morning April 22, 2009 in what police said was an apparent suicide. (AP Photo/Freddie Mac) AP Photo/Freddie Mac

The chief financial officer of money-losing mortgage giant Freddie Mac was found dead in his basement early Wednesday morning in what police said was an apparent suicide.

David Kellermann, 41, apparently hung himself, said a law enforcement official familiar with the investigation. He asked not to be identified because the investigation was ongoing.

The body was found in the basement after police received a phone call at 4:48 a.m., reports CBS News producer Josh Gross. No official declaration of suicide will be made until the medical examiner has examined the body.

Kellermann's death is the latest in a string of blows to Freddie Mac since it was seized by the government last September. The company, which owns or guarantees about 13 million mortgages, has been criticized for financing risky loans that fueled the real estate bubble and are now defaulting at a record pace.

Freddie Mac lost more than $50 billion last year, and the Treasury Department has pumped in $45 billion to keep the company afloat. Last month, David Moffett, the government-appointed chief executive, resigned in frustration over strict oversight.

Kellermann worked for Freddie Mac more than 16 years, starting out as a financial analyst and auditor. He was named acting chief financial officer last September when the government ousted former CEO Richard Syron and Kellermann's predecessor Anthony S. "Buddy" Pizsel.

Neighbors said Kellermann had lost a noticeable amount of weight under the strain of the new job. Some neighbors said they suggested to Kellermann should quit to avoid the stress, but Kellermann responded that he wanted to help the company through its problems. The neighbors did not want to be quoted by name because they didn't want to upset the family.

As the company's financial chief, Kellermann oversaw a staff of about 500 and was working on the company's first-quarter financial report, due by the end of May. Federal regulators closely oversee the company's books and sign off on major decisions.

That relationship has been tense and stressful, with Kellermann working long hours, a colleague said. Freddie Mac executives recently battled with federal regulators over whether to disclose potential losses on mortgage securities tied to the Obama administration's housing plan, said a person familiar with the deliberations who was not authorized to discuss the matter publicly.

Freddie Mac and sibling company Fannie Mae have both come under fire from lawmakers because they plan to pay more than $210 million in bonuses through next year to give workers the incentive to stay in their jobs. Kellermann got $170,000 and was to receive another $680,000 over the next year.

Federal prosecutors in Virginia have been investigating Freddie Mac's business practices. But two U.S. law enforcement officials, who spoke on condition of anonymity because they were not authorized to discuss the Freddie Mac investigation, said Kellermann was neither a target nor a subject of the investigation and had not been under law enforcement scrutiny.

Just last month, Freddie Mac granted Kellermann protection from any civil lawsuits, reports CBS News correspondent Sharyl Attkisson.

Kellermann is the latest figure in the financial meltdown to meet a tragic end, Attkisson reports. Police are also investigating a bizarre incident at a Maryland hotel this week in which a New York lawyer, accused of bilking investors out of millions, apparently killed his wife, two daughters and himself.

In December, money manager Rene-Thierry Magon de la Villehuchet, slit his writs. A former Bear Stearns analyst jumped out a 29th story window, a hedge fund manager suffocated himself, and others facing collapsed fortunes took their own lives.

Police responded to an emergency call early Wednesday morning at the suburban Virginia home Kellermann shared with his wife Donna and 5-year-old daughter Grace.

Paul Unger, who lives across the street from the Kellermanns in the Hunter Mill Estates community in Fairfax County, called the family a "solid, salt-of-the-earth kind of family" that hosted the neighborhood's Halloween party. "He was just a nice guy ... You cannot imagine what kind of pressures he must have been under," Unger said.

Kellermann graduated from the University of Michigan. He later went to business school at George Washington University and started at Freddie Mac in 1992.

News of Kellermann's death came as a shock to employees of the McLean, Virginia-based company, with those who knew Kellermann tearing up on Wednesday morning and a quiet mood prevailing. Senior executives at the company heard the news on local radio before going to work.

Freddie Mac canceled a bond offering on Wednesday and top executives visited the family's home to offer condolences. John Koskinen, the company's interim chief executive, spoke to workers at an 11 a.m. staff meeting mourning Kellermann's loss, telling employees that they could use the company's counseling services and take time off if necessary.

In statement e-mailed to employees and the media, Koskinen called Kellermann "a man of great talents .... His extraordinary work ethic and integrity inspired all who worked with him."

Treasury Secretary Timothy Geithner said in a statement that "our deepest sympathies are with his family and his colleagues at Freddie Mac during this difficult time."
  • CBSNews

Comments