By Deborah Charles
RESTON, Virginia (Reuters) - David Kellermann, acting chief financial officer of troubled U.S. mortgage giant Freddie Mac, was found dead on Wednesday in his suburban Virginia home after apparently committing suicide, a local police source said.
Kellermann, 41, was named Freddie Mac's acting CFO last September after the Treasury Department seized the company, and its sibling mortgage agency Fannie Mae, as the agencies faced deep losses on a crashing U.S. housing market that was rapidly engulfing other financial institutions.
A police source said Kellermann was found hanging in the basement of his home in Reston, an affluent suburb of Washington, in an apparent suicide.
There was no indication what might have driven him to kill himself.
In March, Freddie Mac said that it was cooperating with the Securities and Exchange Commission in a probe and that employees had been interviewed by investigators.
Freddie Mac said it knew of no link between federal investigations and Kellermann's death.
"Freddie Mac knows of no connections between this terrible personal tragedy and the ongoing regulatory inquiries discussed in our SEC filings," said David Palombi, the executive communications officer for the mortgage finance company.
A 16-year veteran of Freddie Mac, Kellermann had played a key role in helping the firm navigate past accounting scandals and answer questions from regulators and investors who put the company under intense scrutiny as the U.S. housing market ended a five-year boom in 2006.
"The accounting team has been under incredible pressure for years and there are those you might worry about how they are dealing with the stress, but he was not one of them," said a former Freddie Mac executive who worked with Kellermann.
There have been several high-profile suicides of business executives around the world in the last six months as the financial crisis took hold.
FOUL PLAY NOT SUSPECTED
Police officials in Fairfax County would not confirm Kellermann's death was a suicide but said police were called at 4:48 a.m. EDT to his home.
"Officers arrived and were directed to the basement of the home where they found David Kellermann dead," said Eddy Azcarate, a spokesman for Fairfax County Police.
"We are not speculating as to the manner and cause of death. We're going to wait for the medical examiner to give that information," he said. "We do not suspect foul play."
He said police never discuss if any notes are found.
While Freddie Mac has seen its executive ranks churn since accounting improprieties first emerged in 2003 and as it has booked multi-billion dollar losses in recent quarters, those who knew Kellermann spoke of his good character and dedication to the job.
"For many years, we have known David as a person of the utmost ethical standards who was hardworking and knowledgeable in his field," the Federal Housing Finance Board, Freddie Mac's chief regulator, said in a statement.
U.S. Attorney General Eric Holder, asked about the death, said it was "obviously tragic but I don't know anything more than what I've read." He replied "no idea" when asked if Kellermann's death might be related to any probe of Freddie Mac.
'SMART GUY' WHO ROSE FAST
Freddie Mac and Fannie Mae, known as government-sponsored enterprises, had a hand in about half of the entire U.S. mortgage market and were taken over last year in an effort to ward off further damage to the U.S. housing market.
Colleagues and former co-workers were shocked at the news of Kellermann's death.
"He was a smart guy who had risen fast. And people liked being around him. That's not something you could say about everyone there," the former executive said.
Kellermann had been closely involved in many key accounting and financial issues since 2003 when regulators found that Freddie Mac had improperly booked years of losses.
Before taking over as acting CFO, he served as senior vice president, corporate controller and principal accounting officer.
He volunteered in the community with a charity for the homeless. He was married and one neighbor said the couple had a girl aged about 5 or 6.
"They were the last people in the world you'd think this would happen to," said Susan Unger, who lives across the street from the Kellermans in the quiet Hunter Mills Estates. She described the couple as "very wonderful neighbors."
Police spokesman Azcarate said Kellermann's family was still in the house, and "they are surrounding themselves with additional family and friends."
The New York Times said that according to neighbors and company officials, Kellermann had received a bonus of about $800,000. Such bonuses -- which totaled $210 million for executives at Freddie Mac and its sibling company Fannie Mae -- prompted scrutiny from lawmakers who have questioned bonuses for executives of firms receiving government bailouts.
The Times said that Kellermann hired a private security firm after reporters came to his house to ask about his bonus.
HIGH-PROFILE SUICIDES
Kellermann's death followed several high-profile suicides in the global financial crisis.
German billionaire businessman Adolf Merckle threw himself in front of a train in January after heavy losses on the stock market.
Merckle's business empire included major cement and drug companies but was hobbled by debt and effectively controlled by the banks that lent it money after a series of wrong-way bets on stock investments.
In December, Frenchman Thierry Magon de la Villehuchet, 65, co-founder of money manager Access International, was found dead in a New York office building, reportedly distraught over losing up to $1.4 billion in client money to Bernard Madoff's fraud. He slit his wrists with boxcutters.
(Additional reporting by Patrick Rucker in Washington and Walden Siew in New York; Editing by Frances Kerry)