Mo Fayne allegedly tried to take advantage of the coronavirus pandemic ... the feds say he took a small business loan for COVID-19 relief and used it to bankroll a lavish lifestyle.
The "Love & Hip Hop: Atlanta" star has just been arrested on federal bank fraud charges ... the result of a Paycheck Protection Program loan he obtained for a company named Flame Trucking.
The feds claim Mo took the money -- which was meant to help employees and small businesses hit hard by the raging pandemic -- and used the dough to buy $85,000 worth of jewelry and pay off a bunch of personal debts, including child support.
Within days of getting a PPP loan for over $2 million, the feds say Mo used more than $85k to buy a Rolex Presidential watch, a diamond bracelet, and a 5.73-carat diamond ring for himself.
The alleged spending spree didn't stop there ... Mo is also accused of using the loan on a 2019 Rolls-Royce Wraith and to pay a $40,000 child support tab.
According to new legal docs obtained by TMZ ... when federal agents asked Mo whether he used any of the PPP loan to purchase the luxury car, Fayne said, "Kinda, sorta, not really."
The feds also say the searched Mo's house Monday and found a bag with about $70,000 in cash and another $9,400 stuffed in his pockets.
Agents say they also seized $503,000 of the loan proceeds from 3 bank accounts owned or controlled by Mo.
Mo signed and submitted a PPP loan application in the name of Flame Trucking back in April, according to the feds, stating the biz had 107 employees and an average monthly payroll of about $1.5 million.
PPP loans were part of the CARES Act, a federal law designed to provide emergency financial assistance to the millions of Americans suffering the economic fallout from the COVID-19 pandemic.