Yes. A conviction of a felony involving certain kinds of intent or
fraud or intent to deceive has been used to deny a person an ATP.
There are a couple of cases in which pilots were caught with forged
logbooks when presenting them for review for the ATP and the FAA found
that was grounds for denial on the basis of good moral character.
There have been revocations in which the pilot was found to have
engaged in a violation of an FAR that was of the sort that the FAA felt
reflected adversely on good moral character and when the pilot went to
reapply for his ratings, the highest he could get was a commercial
ticket.

It would be interesting to research the history of the requirement.
I've always wondered if it went back to the original "transport" rating
with the Dept of Commerce and the public concern that airline captains
should be something more than just physical and mental ability to fly
the airplane.

All the best,
Rick