CFO of Freddie Mac Found Dead in Fairfax County Home
David Kellermann, 41, was found dead in his home in Fairfax County this morning. Kellermann was acting Chief Financial Officer for mortgage giant Freddie Mac. He shared the home, which was in the Hunter Mill subdivision in the Vienna area of Fairfax, with his wife and daughter. according to local authorities. Officers responded to call from Kellermann’s wife at 4:48 AM. When they reached the house, they found Kellermann’s body in the basement, he had apparently hanged himself. No suicide note was found. He was hired by Freddie in 1992 as an analyst. He was promoted to the office of CFO last September, when Freddie Mac was taken over by the government and it’s top executives removed. The job is very demanding and Kellermann was monitored very closely by the government regulator assigned to watch Freddie Mac.
The company, as well as rival mortgage giant Fannie Mae, had made investment errors which led to billions of dollars in losses. The government has already awarded almost $60 billion in bailout money to the two companies. Kellermann was involved in some recent controversies within the company. He, along with several company attorneys battled with the regulator over the disclosure of costs related to implementing the Obama housing plan. A group of Freddie Mac employees wanted to disclose the $30 billion estimate but the regulator was strongly opposed. The group claimed that the disclosure was a legal obligation and they needed SEC approval if they failed to make the disclosure. In the end, the regulator gave in.
Freddie is currently under investigation by both the SEC and Dept. of Justice for improprieties in its accounting procedures. The SEC has issued several subpoenas for company documents and is holding interviews with past and current employees. An investigation into Freddie Mac by the US Attorney’s Office in New York’s Southern District ended with no action being taken. A new investigation was started at the end of 2008 by the US Attorney’s Office in Virginia’s Eastern District. The SEC’s investigation is in its early stages and is part of a broader examination at many financial institutions believed to have contributed to the poor state of the economy.
The lives of key Freddie Mac employees have been greatly altered in the last year since the housing market collapsed and the recession began. What used to be a major financial company is now almost a government agency playing a major role in the implementation of Obama’s housing plan. Freddie and Fannie Mae were chastised early in April after announcing plans to pay out more than $200 million in retention bonuses to key employees over an 18-month period. The regulator, James B. Lockhart, defended the action, saying that the companies’ current employees “are an important part of the solution and not the problems of the past.” Kellermann himself was set to receive $850,000 over the 18 months, of which he has only received $170,000 so far.