kellerman home 248.88.
(photo credit: AP)
The chief financial officer of Freddie Mac, one of the mortgage giants at the heart of the US financial meltdown, was found dead in his basement early Wednesday morning in what police said was an apparent suicide.
David Kellermann, 41, apparently hanged himself in his suburban Washington home, said a law enforcement official familiar with the investigation. He asked not to be identified because the investigation was ongoing.
Kellermann was promoted last September when the government seized the mortgage company and ousted its top two executives. Neighbors said Kellermann had lost a noticeable amount of weight under the strain of the new job. Some neighbors said they suggested to Kellermann that he 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.
Kellermann oversaw a staff of about 500 at Freddie Mac's McLean, Virginia, headquarters 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, 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. The company 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.
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 US 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.
This is at least the fifth high-profile executive suicide in as many months.
In January, German billionaire investor Adolf Merckle, who lost a fortune in shorted Volkswagen stock, threw himself under a commuter train. Patrick Rocca, an Irish property investor who lost millions when the real estate market bottomed out, waited until his wife took their children to school before he shot himself in the head. Outside Chicago, real estate mogul Steven Good was found dead in his Jaguar, apparently from a self-inflicted gunshot wound.
And three days before Christmas, Rene-Thierry Magon de la Villehuchet killed himself in his 22nd-floor office in Manhattan. He'd lost his entire savings, and his clients' money, to Bernie Madoff's alleged pyramid scheme.
Police responded to an emergency call at 4:48 a.m. 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.
Jeffrey Martin, a lawyer and high school classmate from Bay City, Michigan, recalled that Kellermann wanted to be "Alex P. Keaton," the television character played by Michael J. Fox on the 1980s sitcom "Family Ties."
Kellermann "knew he wanted to climb the corporate ladder, and he climbed the corporate ladder," Martin said.
News of Kellermann's death came as a shock to employees, 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."
And Michael Ferrell, executive director of the DC Coalition for the Homeless, where Kellermann was a volunteer board member, described him as a "compassionate, dedicated and committed."