Owner of a trucking company and a reality TV star Maurice Fayne was arrested and charged with misusing federal funds from a PPP program intended as COVID 19 relief.
Fayne also faces charges with wire fraud of $5 million in a Ponzi scheme.
Fayne, also known under the pseudonym “Arkansas Mo,” is the owner of Flame Trucking. He also appeared on “Love & Hip Hop: Atlanta,” a reality TV show on VH1.
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April 2020: Flame Trucking Files for a PPP Loan
In late April 2020, Flame Trucking asked for a $3,725,500 loan from United Community Bank. The company certified that the money would be purposed for “retaining workers and maintaining payroll or make mortgage interest payments, lease payments, and utility payments, as specified under the Paycheck Protection Program Rule,” the written statement for the bank loan by Flame Trucking, the affidavit, states.
Fayne stated during his request for the loan that his company employs 107 people and has an average monthly payroll of $1,490,200.
Flame Trucking got a $2,045,800 approved in the loan, as is stated in the affidavit.
Fayne Uses PPP Funds to Cover Debts and Buy Vanity Items
Instead of using the money into what he certified they would be used for, Fayne spends $85,000 in custom-made jewelry, buying a diamond bracelet, a diamond ring, and a Rolex watch for himself. He also spent $40,000 to pay child support to his ex-wife Karlie Redd and $136,000 to lease a 2019 Rolls Royce Wraith. He also made loan payments with $50,000 of the PPP funds.
$230,000 of PPP Funds to Cover Ponzi Scheme & Gambling Debt
Fayne used a substantial amount, $230,000 of the PPP loan, to cover his Ponzi scheme he was running with what is now cemented as failing Flame Trucking company.
According to documents, Flame Trucking was never generating enough revenue to cover its expenses. Despite this fact, Fayne convinced 20 individuals to invest more than $5 million in the company, promising he would use it to increase the fleet’s capabilities. Instead, Fayne used the funds to pay off his debs and expenses and further fund his luxurious lifestyle.
Documents also show that Fayne transferred over $5 million to a casino to cover his gambling expenses.
He used another $907,000 of the PPP loan to help an associate to start a business.
Fayne’s Statement Rises Red Flags with UCB
Fayne structured his financial transactions to conceal the nature, location, source, ownership, and control of the proceeds. This raised red flags with UCB, who asked Fayne to provide information about Flame Trucking. Fayne then proceeded to create fraudulent bank statements with Arvest Bank for October, November, and December 2019, even though his Arvest account was shut down in September 2019.
Following this, Fayne was interviewed by federal agents on May 6 regarding the use of the PPP funds, and he stated that he had used all of the funds for payroll and other business expenses.
Seizure of Fayne’s Property
May 11, federal agents searched the Fayne residence in Dacula, Georgia, and found and seized $79,482 in cash. This included the $9,400 that Fayne had on his person. They also seized the jewelry he purchased with the PPP loan, including a $3,750 diamond ring, a $24,500 diamond bracelet, and a $52,000 Rolex watch.
Seizure warrants were also executed, and seven bank accounts of Fayne’s were seized with approximately $617,000 in PPP funds in them, reported prosecutors.
Federal agents also seized eight Kenworth T-680 tractors and six Great Dane refrigerated trailers.
When asked about it, Fayne told the federal agents that he used the PPP loan to buy the jewelry, but when asked about the Rolls Royce loans, he responded, “Kinda, sorta, not really.”
Official Attorney Statement
The U.S. Attorney Byung J. “BJay” Pak stated: “The emergency lending provisions of the Payback Protection Program were intended to help small businesses survive the COVID-19 pandemic,… Fayne allegedly used PPP loan proceeds to live a luxurious lifestyle that included leasing a Rolls Royce and purchasing expensive jewelry, as well as making payments to individuals involved in a Ponzi scheme. We intend to investigate and charge anyone who inappropriately diverts these critical funds for personal gain.”