Wednesday, April 22, 2009

Another One Bites the Dust: Police Found Freddie Mac CFO Dead by Hanging

Police believe David Kellermann, 41, Killed Himself in HIs Virginia Home
April 22, 2009

Law enforcement sources said David Kellermann, acting chief financial officer of mortgage company Freddie Mac, was found hanging in the basement of his Vienna, Va., home, dead from an apparent suicide early this morning.

David Kellerman, CFO of Freddie Mac, was found hanging in his home.
The death was "an active investigation" and there were "no signs of foul play," Fairfax County police officer Sabrina Ruck said.

Local police said they were called to Kellermann's home at 4:48 a.m., but would not say who'd placed the call to 911.

Kellermann, 41, and a 16-year veteran of Freddie Mac, had been the company's CFO since September, after a government takeover of the company following the housing crisis. County records show the large home in Hunter Mill Estates was worth about $900,000.

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Neighbors said they were shocked to learn of the man's death.

"This is a solid salt of the earth kind of family and guy, and I just cannot imagine what has occurred," neighbor Paul Ungar said. "I mean, I understand the economy, I understand what's gone on with those companies, but I just can't imagine what would have driven him to that."


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Freddie Mac had been criticized for reckless business practices that some argued contributed to the housing and financial crisis. The company is controlled by the government and owns or guarantees about 13 million home loans.

Freddie Mac and sibling company Fannie Mae, which together own or back more than half the home mortgages in the United States, have been hobbled by skyrocketing loan defaults and have received about $60 billion in combined federal aid.

Kellermann was named acting chief financial officer in September 2008, after the resignation of Anthony "Buddy" Piszel, who stepped down when the government took over.

According to securities reports filed in March, Kellermman was to receive an $850,000 bonus.

Kellermann owned 43,000 shares of Freddie Mac stock last summer, worth about $395,000. As the company's stock plummeted from $9 a share in July to 80 cents or so this morning, he had slowly sold off some shares, for pennies on the dollar. His holdings of 38,861 shares, as of April 11, were worth $30,000, according to ABC News' calculations of Security and Exchange Commission filings.

In filings with the SEC in March, Freddie Mac said it had entered into a pact with Kellermann and two other company executives to protect them from liabilities and expenses in connection to any threatened or pending lawsuits. The agreement, which kicked in retroactively from the time of the government takeover, would not protect the officials from willful criminal misconduct.

In an SEC filing from September, Freddie Mac disclosed that it received a federal grand jury subpoena from the U.S. Attorney's Office for the Southern District of New York seeking information about the company's accounting, disclosure and corporate-governance procedures. The subpoena was withdrawn, and the investigation was taken over by the U.S. Attorney's Office for the Eastern District of Virginia.

Before he was named acting CFO, Kellermann served as senior vice president, corporate comptroller and principal accounting officer.

"We at FHFA are very saddened by the death of David Kellermann," the Federal Housing Finance Agency, the government agency that oversees Freddie Mac, said in a statement.

"For many years, we have known David as a person of the utmost ethical standards who was hardworking and knowledgeable in his field. As the Acting Chief Financial Officer of Freddie Mac during particularly challenging times, David was an inspiration to his staff and many others who were privileged to work with him. We extend our condolences to his family, friends and colleagues," the statement read.

Kellermman, a graduate of the University of Michigan and the George Washington University School of Business, was married with one daughter.

ABC News' Tom Giusto and Scott Mayerowitz contributed to this report, which was supplemented by to The Associated Press.

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