Freddie Cfo Found Dead

Executive's Apparent Suicide Adds To Turmoil At Troubled Mortgage Giant

April 23, 2009|By Jim Puzzanghera | Jim Puzzanghera,Tribune Washington Bureau

WASHINGTON -In another blow to troubled mortgage giant Freddie Mac, one of the company's top executives was found dead in his Virginia home Wednesday, the victim of an apparent suicide.

The death of David Kellermann, 41, the acting chief financial officer, adds more turmoil at Freddie Mac, which was seized by the government in September along with its sister company, Fannie Mae, as they teetered near failure because of the housing market meltdown. Since then, Freddie has become the subject of a series of investigations by the Justice Department and the Securities and Exchange Commission.

There was no indication Kellermann, a longtime employee who took over as acting CFO in September, was a focus of those investigations.

"Freddie Mac knows of no connection between this terrible personal tragedy and the ongoing regulatory inquiries discussed in our recent SEC filings," said Doug Duvall, a company spokesman.

Federal officials have replaced the chief executives at the two government-sponsored enterprises, which together owned or guaranteed about half of all outstanding mortgages. Freddie Mac lost more than $50 billion last year, and the Treasury Department has pumped in $45 billion to keep the company afloat.

Troubles have continued for McLean, Va.-based Freddie Mac as it announced last month that it had a $23.9 billion net loss in the fourth quarter of last year. David Moffett, who was named CEO by federal officials during the takeover, resigned last month.

And the pending investigations have increased pressure on the mortgage financing firm. Officials with the SEC and the U.S. attorney's office for the eastern district of Virginia, which is conducting the Justice Department probe, would not comment.

"Freddie Mac has undergone a period of corporate chaos that may be unmatched in the financial system," said Jaret Seiberg, a financial policy analyst with the Washington Research Group, noting the problems began with an accounting scandal in 2003.

"Your heart has to go out to all the employees. ... It's not enough that they've endured tremendous financial and political hits to the company they've helped build, but now they've lost a colleague," Seiberg said.

Kellermann's body was found in his home in Fairfax County just before 5 a.m. Wednesday, according to police. The cause of death had not been determined, but police said there were no signs of foul play. News reports indicated that he had hanged himself in the basement of the home he shared with his wife and 5-year-old daughter, but police would not comment.

Kellermann began working for Freddie Mac in 1992, rising from a financial analyst/auditor to the company's controller and principal accounting officer before taking on the CFO job as part of the management shake-up. His profile on the corporate social networking Web site, Linked In, noted that he had "succeeded at an ever-increasing level of responsibility" at the company.

According to the Freddie Mac Web site, Kellermann was also a volunteer board member of the D.C. Coalition for the Homeless.

He and his family lived in a four-bedroom house in an upscale development that was assessed at $957,480 last year, according to property records. He and his wife, Donna, had purchased the home in 1999 for $545,000.

The Associated Press contributed to this article.

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