I guess in the end, Reaganomics didn’t work for this guy!

March 26 (Bloomberg) — David Stockman, President Ronald Reagan’s budget director, was indicted for fraud for misleading investors while chairman of bankrupt auto-parts maker Collins & Aikman Corp., his lawyer said.

Stockman, who was also Collins & Aikman’s chief executive officer, was accused with at least three other persons by U.S. prosecutors in New York today of issuing fraudulent and overly optimistic public statements about the company, his lawyer Elkan Abramowitz, said. Stockman resigned on May 17, 2005, five days before the company filed for bankruptcy.

Stockman is the first CEO of a bankrupt U.S. auto parts company, to be charged criminally. Five auto-parts makers have gone bankrupt in the last two years. Axle-maker Dana Corp. and former officials of Delphi Corp., the largest U.S. auto-parts maker, are being investigated by the U.S. Securities and Exchange Commission over restatements of the companies’ finances.

Stockman ran into trouble after saddling Collins & Aikman with too much debt, said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Michigan. “Collins & Aikman was one of the first companies to get into real difficulty” in the U.S. auto-parts industry, he said.

Also charged were former Collins & Aikman vice chairman, J. Michael Stepp, ex-controller David Cosgrove and Paul Barnaba, Abramowitz said today in federal court while awaiting the unsealing of his client’s indictment.

More at Bloomberg

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