WASHINGTON, Nov. 6 (UPI) -- Freddie Mac's former chief has agreed to pay $16.4 million to settle his role in a Freddie Mac accounting scandal, a U.S. regulatory agency said Tuesday.
Former Chairman and Chief Executive Officer Leland Brendsel agreed to pay a $2.5 million fine, return $10.5 million in previously paid salary and bonuses to Freddie Mac, and waive claims for another $3.4 million in compensation, the U.S. Office of Federal Housing Enterprise Oversight said.
The settlement with the office that regulates Freddie Mac and sibling government-sponsored enterprise Fannie Mae "represents a satisfactory conclusion to the enforcement actions" stemming from the government's Freddie Mac probe, which began in 2003, said James Lockhart, director of the oversight office.
Brendsel neither admitted or denied wrongdoing, his attorney, Kevin Downey, said.
Downey said although Brendsel and the oversight office disagree strongly about what happened, Brendsel agreed to settle because most of the money is to go to families facing the loss of their homes in the current mortgage credit crisis.
Brendsel "established a corporate culture that allowed improper earnings management to develop," the oversight office had alleged.
Freddie Mac's accounting mistakes required the company to restate close to $5 billion in earnings from 2000 to 2002.
