Love and Hip Hop: Atlanta star Maurice Fayne, also known as Arkansas Mo, was arrested on Wednesday and charged with federal bank fraud.
According to the U.S. Department of Justice, Mo obtained a Paycheck Protection Program (PPP) loan in the name of trucking company, Flame Trucking, during the coronavirus pandemic but he allegedly spent the funds on himself.
Mo used the more than USD$2 million he received from the government due to the COVID-19 pandemic to purchase a Rolex, a diamond ring and a diamond bracelet.
Mo, the ex-husband of Love and Hip Hop: Atlanta star Karlie Redd, also leased a 2019 Rolls-Royce Wraith, which still had a temporary dealer tag on it when agents searched his house, and paid off $40,000 in child support instead of distributing the funds to his 107 employees.
He denied the allegations when he was initially interviewed by federal agents, but after searching his home they seized approximately $80,000 in cash.
The cash amount seized included the $9,400 that Mo had in his pockets and the jewelry he allegedly bought with the PPP funds, according to the Department of Justice.
Authorities said that they also seized approximately $503,000 in PPP funds from three of his bank accounts.
According to the press release from the Department of Justice, Flame Trucking asked for a loan of $3,725,500 and claimed that the loan proceeds would be used to “retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility payments, as specified under the Paycheck Protection Program Rule.”
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United Community Bank ultimately funded the loan for $2,045,800 in late April, according to the press release.
“Fayne told the agents that he believed he had the right to use part of the PPP loan proceeds for ‘other business purposes’ and for ‘working capital,’” the document said.
“The defendant allegedly stole money meant to assist hard-hit employees and businesses during these difficult times, and instead greedily used the money to bankroll his lavish purchases of jewelry and other personal items,” Assistant Attorney General Brian A. Benczkowski said in a statement.
“The department will remain steadfast in our efforts to root out and prosecute frauds against the Paycheck Protection Program.”
“At a time when small businesses are struggling for survival, we cannot tolerate anyone driven by personal greed, who misdirects federal emergency assistance earmarked for keeping businesses afloat,” Special Agent in Charge Chris Hacker of the FBI’s Atlanta Field Office said. “The FBI and our federal partners remain vigilant during this Coronavirus pandemic to make sure funds provided by programs like PPP are used as intended.”
“The defendant allegedly egregiously sought personal gain from a program intended to assist hardworking Americans in this challenging time,” said Special Agent in Charge Kevin Kupperbusch of the Small Business Association Office of Inspector General (SBA OIG) Eastern Region. “SBA OIG and its law enforcement partners will aggressively pursue allegations of wrongdoing to maintain the integrity of SBA’s programs. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”
Mo’s lawyer told CNN there’s “considerable confusion among small business owners” about PPP guidelines.
“There has been considerable confusion among small business owners about PPP guidelines — particularly around the question of whether and how business owners are permitted to pay themselves a salary or take an owner’s draw. I hope these issues to be better fleshed out in the weeks and months to come,” Tanya Miller said in a statement.
“For obvious reasons, we cannot try these allegations in the media,” Miller said. “We will provide the appropriate response in the proper forum once all the information has been provided to us.”
Mo made his initial court appearance on Wednesday and he was released on a $10,000 bond.
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