Stephen Belafonte, Prosecutors Reviewing Firearms Case for Possible Prosecution

Federal prosecutors are looking at evidence that was seized at Stephen Belafonte's home to determine if he should be prosecuted on federal weapons charges ... TMZ has learned.

TMZ broke the story ... ATF agents raided the Hollywood Hills home Friday night to determine if Belafonte was in possession of a gun or ammunition. He's not allowed to have either after being convicted of domestic violence back in 2003.

Law enforcement sources tell us, ATF agents did not find a gun, but they did find an empty shell casing and a bullet that was out of the casing. Neither item in itself is a projectile, so it does not constitute "ammunition."

That said, we're told the U.S. Attorney in L.A., who obtained the search warrant which led to Friday's raid, is reviewing the case for possible prosecution. We're told the items have some circumstantial value but there's other evidence as well. Both Mel B and Stephen's brother would testify they have seen Stephen in possession of the gun on multiple occasions.

Our sources say other evidence was also seized Friday night, but they wouldn't give specifics.

We're told ATF continues to investigate.

If Belafonte is charged and convicted of illegal possession of a firearm, he could face up to 10 years in prison.