Terrance "T.A." Dixon, once a hype man to rapper Fat Joe, has sued his former employer for $20 million, making some allegations that might blend right in at Sean "Diddy" Combs' RICO and sex-trafficking trial.

Fat Joe is denying accusations in a $20 million lawsuit filed by his former hype man T.A. Dixon that alleges he 'personally witnessed' the rapper's sexual relations with minors.

Ja Rule says Fat Joe's "All the Way Up" amid his new legal headache ... telling us the rapper's in good spirits despite the claims of underage sex against him. ICYMI ... Dixon -- represented by attorney Tyrone A.