A convicted felon was busted by police for allegedly running an illegal pawn shop in Waikiki.

The Honolulu Police Department announced Friday that officers arrested 45-year-old Luke Warner after a two-month undercover investigation of his pawn shop "Careful Concepts."

Police arrested him Thursday evening after its undercover officer sold Warner a .45-caliber semi-automatic handgun in the parking lot of McDonald's on Keeaumoku Street.

HPD says Warner knowingly bought stolen goods with cash or by exchanging illegal drugs.

"This was the firearm sold to him last night that he bought at the McDonald's.  The cash was recovered as part of a search warrant that was executed on (Warner's) apartment, which is also his place of business," said Maj. Richard Robinson.  "Those drugs are the drugs that we recovered from his apartment last night, and you can see they appear to be packaged for distribution."

Warner's Careful Concepts pawn shop is located inside the Hawaiian Monarch Hotel in Waikiki.

Warner was convicted of four felonies, including burglary.  HPD says it will seek new legislation, similar to Florida's pawn shop laws, which require operators to input all pawn items into a computerized system.

Warner faces eight felony charges, each carrying a maximum of 20 years in prison.