Petition for Writ of Certiorari — Venneri v. United States

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IN THE

Supreme Court of thy Mvited States

OCTOBER TERM, 1984

JOSEPH VENNERI,

Petitioner,

V.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

GEOFFREY P. GITNER

1800 K Street, N.W.

Suite 610

Washington, D.C. 20006

Counsel of Record

QUESTIONS PRESENTED

1. Whether, under the Mail Fraud Act, 18 U.S.C. §1341, a

private employee’s undisclosed breach of his duty to his

employer to provide honest, faithful and loyal services may

constitute a “scheme to defraud” under the federal Mai!

Fraud Act where the employer has received no economic

loss or business risk as a result of the employee’s breach.

2. Whether a private sector contractor has a legally

protected right to have his bids for private sector business

contracts judged solely on the basis of merit, quality and costs

and whether the violation of such a right can serve as a

predicate for criminal prosecution under the Mail Fraud Act,

18 U.S.C. §1341, against a private sector competitor found to

have engaged in a scheme to defraud the contractor, by

securing the contract on a basis other than merit, quality and

costs.

TABLE OF CONTENTS

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TOE os bebe deecevevecastesceveces 2

TET TEEPE LET TT TEE EE ETT 2

STATUTORY PROVISION INVOLVED ........... 2

ET Si ckeb hh evh oh kee hbbeeveneecscccsecs 3

REASONS FOR GRANTING THE WRIT .......... 5

6 | | GAPS IT TET Tee CLE TTR Eee 11

APPENDIX:

Appendix A - The Opinion of the United States

Court of Appeals for the Fourth Circuit ........ A-1

iii

TABLE OF AUTHORITIES

Cases

Badders v. United States, 240 U.S. 391 (1916) ..... 6

Blachly v. United States, 380 F.2d 665,

eS eer eerere 7

Gregory v. United States, 253 F.2d 104

es wa dieddhs 9, 10

United States v. Ballard, 663 F.2d 534

(5th Cir. Unit B 1981) aff’d as modified,

680 F.2d 352 (5th Cir. Unit B 1982) ............. 7

United States v. Bethea, 672 F.2d 407

ee ee ee eee ee eer rey 7

United States v. Bronston, 658 F.2d

920 (2d Cir. 1981), cert. denied,

io ohio dns cece ciacccs 7

United States v. Castor, 558 F.2d 379

(5th Cir. 1977), cert. denied, 434

LA ETE 9, 10

United States v. Feldman, 711 F.2d 758,

763 (7th Cir. 1983), cert. denied, 104

ee cau uicualn’e 7

United States v. Lemire, 720 F.2d 1327 (D.C.

a fA

United States v. Newman, 664 F.2d

12 (2d Cir. 1981), cert. denied, ___ U.S.

Ba Se SC eee 6,7

United States v. Shamy, 656 F.2d 956

SE ee 7

United States v. Von Barta, 635 F.2d

999 (2d Cir. 1980), cert. denied, 450

ee EE 236 ce asccuatistiasaressenueds- 7

iV

Statutes:

WS ULS.C. G1941 (ital Fraud). 200000 ccrccceeses

18 U.S.C. §1343 (Wire Fraud) ................4.

Se es I soe ooo rhea eek

Miscellaneous:

Coffee, The Metastasis of Mail Fraud: The

Continuing Story of the “Evolution”

of a White Collar Crime, 21 AM. CRIM.

Se ee ner re

Coffee, From Tort to Crime: Some Re-

flections on the Criminalization of

Fiduciary Breaches and The Problematic

Line Between law and Ethics, 19

PDA. GRE. © TE, FEF CP cece ccc csesess

Hagan & Nagel, White-Collar Crime, AM. CRIM.

L. REV. 259, 286 (Table 6) (1982)...............

D. Hurson,Limiting the Federal Mail

Fraud Statute - A Legislative Approach,

20 AM. CRIM. L. REV. 423 (1983) .............

UNITED STATES ATTORNEY’S OFFICE,

STATISTICAL REPORT, FISCAL YEAR 1981

FREE cata chasieeh ae aba ness kxne ae

UNITED STATES ATTORNEY’S OFFICE,

STATISTICAL REPORT, FISCAL YEAR

TO is sc as,

UNITED STATES ATTORNEY’S OFFICE,

STATISTICAL REPORT, FISCAL 1979 (Table 3)

No. 84 -

IN THE

Supreme Court of the Mnited States

OCTOBER TERM, 1984

JOSEPH VENNERI,

Petitioner,

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

Joseph Venneri, the pc. ‘oner herein, prays that a writ of

certiorari issue to review the judgement of the United States

Court of Appeals for the Fourth Circuit entered in the above-

entitled case on June 21, 1984.

OPINION BELOW

The opinion of the United States Court of Appeals for the

Fourth Circuit, attached hereto as Appendix A, is as of yet

unreported.

JURISDICTION

The judgement of the Circuit Court of Appeals was

entered on June 21, 1984 and no petition for rehearing or

rehearing en banc was filed. The Circuit Court of Appeals

denied petitioner’s motion to stay the issuance of the

mandate on July 17, 1984 without opinion. The jurisdiction of

the Court is invoked under 28 U.S.C. §1254(1) (1976).

STATUTORY PROVISION INVOLVED

18 U.S.C. §1341 (MAIL FRAUD ACT)

Frauds and Swindles

Whoever, having devised or intending to devise

any scheme or artifice to defraud, or for obtaining

money or property by means of false or fraudulent

pretenses, representations, or promises, or to sell,

dispose of, loan, exchange, alter, give away,

distribute, supply or furnish or procure for

unlawful use any counterfeit or spurious coin,

obligation, security, or other article, or anything

represented to be or intimated or held out to be

such counterfeit or spurious article, for the

purpose of executing such scheme or artifice or

attempting so to do, places in any post office or

authorized depository for mail matter, any matter

or thing whatever to be sent or delivered by the

Postal Service, or takes or receives therefrom, any

such matter or thing, or knowingly causes to be

delivered by mail according to the direction

thereon, or at the place at which it is directed to be

RE CRESTS:

delivered by the person to whom it is addressed any

such matter or thing, shall be fined not more than

$1,000 or imprisoned not more than five years, or

both.

STATEMENT

Petitioner Joseph Venneri was a glass and glazing

subcontractor who, along with his partner Denny Stam,

(“Stam”) had over a tifteen-year period performed a large

number of glass installation and glazing construction

subcontracts on Marriott Corporation (“Marriott”) hotel

projects.

In the Fall of 1979, Marriott decided to build a hotel in

Tampa, Florida, on property owned by the Austin-Westshore

Corporation. While Marriott orginially intended to act as its

own general contractor, and received bids from

subcontractors, including Venneri and his associates, on

December 20, 1979, Marriott agreed to hire Austin-

Westshore to build the hotel as the general contractor.

Austin-Westshore, as Marriott, had separately put the project

out for bids, utilizing subcontractors other than Marriott s,

and was able to establish a lower cost than Marriott’s.

According to Philip Graham, then the president of Austin-

Westshore, Marriott was to pay Austin-Westshore a fixed

price for the construction of the hotel. At that time Austin-

Westshore also agreed that if it used a subcontractor who

originally submitted a bid through Marriott, it would reduce

the fixed price of the general contract by the amount that

such a bid was less than the comparable bid received from

the comparable Austin-Westshore subcontractor. However,

Graham testified that those savings would only be passed

through to Marriott on bids submitted before January 10,

1980. With respect to bids received after that date, Austin-

Westshore, and not Marriott, would get the benefit of a lesser

price and a lower bid. Even if a lower bid was received froma

Marriott subcontractor, it would have no effect on the hotel

general contract price paid by Marriott. After the December

20, 1979 agreement, Austin-Wests!.ure had sole authority to

select subcontractors for the Tampa project.

Marriott’s project manager on the Tampa project was

Frederick Taylor. Taylor’s duties as Marriott’s project

manager were to verify work performed and authorize

progress payments to Austin-Westshore. As early as July 1979,

Taylor had begun shopping for a baby grand piano. At that

time, he telephoned the Gisrael Piano Company (“Gisrael”’)

to obtain a price quote for such a piano, and, at that time,

falsely stated that he was a Marriott procurement officer.

On December 13, 1979, Taylor telephoned Gisrael and

ordered a $7,035 baby grand piano. At that time, he told

Gisrael that Stam would pay for it. Gisrael delivered the piano

to Taylor’s home on December 19, 1979 and, on that same

date, mailed an invoice to Stam in care of Taylor’s address."

On January 4, 1980, Taylor, Graham, Terry Down of Mid-

South Glass (Austin-Westshore’s original glass and glazing

subcontractor), Venneri, Stam and their other partner Aaron

Strauss, met in Tampa. Stam, Strauss and Venneri were

introduced to Downs as Marriott consultants and together

they all “scoped” the job, insuring that the scope of the job

specifications was clear and uniform. Shortly after that

meeting, both Mid-South and Venneri’s group submitted

new bids in accordance with the clarification established at

the meeting. Mid-South bid $990,500 and Venneri’s group,

Strauss Glass, bid $950,000. Thus, Strauss Glass was $40,500 less

than Mid-South. On January 24, 1980, Austin-Westshore

awarded the contract to Strauss Glass and gained the benefit

of the $40,500 price savings. Pursuant to Graham’s

understanding of the agreement, Austin-Westshore never

refunded, credited nor remitted the $40,500 savings to

Marriott.

Taylor subsequently informed Gisrael to send the invoices to Stam’s

business address. Gisrael sent Stam two more invoices to Stam’s post office

box. These three invoices serve as the basis for the three mail fraud counts

on which Venneri was convicted.

Thus, there was no ability for Marriott to be economically

deprived in any manner. Venneri’s conviction was based

solely on the breach of Taylor’s fiduciary duty, without either

loss to or risk of loss to Marriott.

On February 20, 1980, Strauss gave Venneri a check made

out to Venneri for the the cost of Taylor’s piano and, on that

same day, Venneri wrote a check on his personal account to

Gisrael for the price of the piano delivered to Taylor more

than two months earlier. It was Taylor’s undisclosed receipt

of the piano which served as the breach of his fiduciary duty

which in turn was the predicate for the mail fraud

prosecution.

Venneri, Stam and Strauss were indicted as a result of this

transaction. Strauss testified on behalf of the government

under an immunity agreement and the case against him was

dismissed. Stam pleaded guilty to one count of mail fraud

midway through the trial and the remaining charges against

him were dismissed. Venneri was conviced by a jury of three

counts of mail fraud in violation of 18 U.S.C §1341, each count

related to a mailing by Gisrael of an invoice for Taylor’s piano.

REASONS FOR GRANING THE WRIT

|. THE CIRCUIT COURTS ARE DIVIDED AS TO THE

REQUIREMENTS OF A SCHEME TO DEFRAUD UNDER

THE MAIL FRAUD ACT IN CASES INVOLVING A PRIVATE

EMPLOYEE’S BREACH OF HIS DUTY OF LOYALTY TO HIS

EMPLOYER.

In recent years, the Department of Justice has relied with

increasing frequency on the use of the mail fraud (18 U.S.C.

§1341) statutes in white collar cases. See Hagan & Nagel,

White-Collar Crime, AM. CRIM. L. REV. 259, 286 (Table 6)

(1982); UNITED STATES ATTORNEY’S OFFICE, STATISTICAL

REPORT, FISCAL YEAR 1981 (Table 3); UNITED STATES

ATTORNEY’S OFFICE, STATISTICAL REPORT, FISCAL YEAR

1980 (Table 3); UNITED STATES ATTORNEY’S OFFICE,

STATISTICAL REPORT, FISCAL 1979 (Table 3). A great part of

that increased use consists of cases involving private sector

employees who failed to disclose to their employer a breach

of their duty of loyalty. See, D. Hurson, Limiting the Federal

Mail Fraud Statute-A Legislative Approach, 20 AM CRIM. L.

REV. 426 428-29 (1983).

This Court has long recognized that the use of the term

“scheme to defraud” in the mail fraud statute was

deliberately intended to allow the statute to maintain its

flexibility and to adjust to the infinite variations of fraud that

men can devise Badders v. United States, 240 U.S. 391

(1916).

As a result of this deliberate use of the vague term “scheme

to defraud” and the expansive language used by other courts

in applying that term, the Circuit Courts of Appeals have split

over the application of the mail fraud statute in situations

where the private employee’s undisclosed breach of his

fiduciary duty has not resulted in any economic risk of loss or

harm to his employer. This division presents both fundamental

and disturbing issues concerning the scope of federal criminal

law enforcement. Through use of the mail fraud statute, the

federal criminal process has been interjected into what had

previously been private employment situations, left to an

employer's right to seek civil redress for its employees’

breaches. Compare, United States v.Lemire, 720 F.2d 1327

(D.C. Cir. 1983), with United States v. Newman, 664 F.2d 12 (2d

Cir. 1981), cert. denied, U.S. , 103 S.Ct. 2095 (1983).

The imprecise application and definition of the term

“scheme to defraud” has led the lower courts to equate

federal criminal laws to ethical aspirations of loyalty:

The fraudulent aspect of the scheme to “defraud”

is measured by a nontechnical standard. . . . Law

puts its imprimatur on the accepted moral

standards and condemns conduct which fails to

match the “reflection of moral uprightness, or

fundamental honesty, fair play and right dealing in

the general and business life of members of society.”

... This is indeed broad. For as Justice Holmes once

observed, “{t]he law does not define fraud; it needs

no definition; it is as old as falsehood and as

versable as human ingenuity.”

Blachly v. United States, 380 F.2d 665, 671 (5th Cir. 1967)

(citations omitted).

In applying this view of the statute, a number of courts

have found that the mere nondisclosure of an employee’s

violation of his duty of loyalty to his employer, in

and of itself, can form the basis for a criminal mail fraud

prosection. Those courts, including the Fourth Circuit in the

opinion below, have found that this disclosed breach, even

without actual or potential monetary risk or loss to the

employer, constitutes a “material nondisclosure” sufficient

to sustain a conviction under the mail fraud statute. United

States v. Von Barta, 635 F.2d 999 (2d Cir. 1980), cert. denied,

450 U.S. 998 (1981); United States v. Bronston, 658 F.2d 920 (2d

Cir. 1981), cert. denied, 456 U.S. 915 (1982); Jnited States v.

Newman supra; United States v. Shamy, 656 F.2d 956 (4th Cir.

1981).

In conflict with these decisions are cases from the Fifth and

District of Columbia Circuits which hold that the mere failure

of a private employee to disclose a conflict of interest or

breach of his duty of loyalty is not sufficiently material to

constitute a federal offense unless the conflict or the breach

results in an economic risk or loss to the employer. United

States v. Ballard, 663 F.2d 534 (5th Cir. Unit B 1981) aff'd as

modified, 680 F.2d 352 (Sth Cir. Unit B 1982);

United States v. Bethea, 672 F.2d 407 (Sth Cir. Unit B 1982);

United States v. Lemire, 720 F.2d 1327 (D.C. Cir. 1983). See,

also, United States v. Feldman, 711 F.2d 758, 763 (7th Cir.

1983), cert. denied, 104 S.Ct. 352 (1983).

In analyzing the comparable language in the wire fraud

statute, 18 U.S.C. §1343, the Lemire court analyzed materiality

as follows:

Employee loyalty is not an end in itself, it isa means

to obtain and preserve pecuniary benefits for the

employer. An employee’s undisclosed conflict of

interest does not by itself necessarily pose a threat

of economic harm to the employer. Therefore, it

does not alone constitute a sufficient indicium that

the employee intended any criminally cognizable

harm to the employer. (footnote omitted) Other

surrounding circumstances may, of course, provide

the necessary proof that an employee intended

such harm. (footnote omitted) We hold today,

however, that an intentional failure to disclose a

conflict of interest, without more, it is not sufficient

evidence of the intent to defraud an employer

necessary under the wire fraud statute. (citation

and footnote omitted) There must be a failure to

disclose something which in the knowledge or

contemplation of the employee poses an

independent business risk to the employer.

United States v. Lemire, supra at 1336-1337.

The question of what constitutes a material nondisclosure

has been the subject of extensive comment in the legal

community. See, Coffee, The Metastasis of Mail Fraud: The

Continuing Story of the “Evolution” on a White Collar

Crime, 21 AM. CRIM. L. REV. 1 (1983); Coffee, From Tort to

Crime: Some Reflections on the Criminalization of fiduciary

Breaches and The Problematic Line Between Law and Ethics,

19 AM. CRIM. L. REV. 117 (1983); D. Hurson Limiting the

Federal Mail Fraud Statute - A Legislative Approach, 20 AM.

CRIM. L. REV. 423 (1983).

Petitioner respectfully submits that the application of the

mail fraud statute into private employment relationships is

a significant expansion of the statute. The split among

the lower courts on the scope of the statute and the concept

of materiality in private sector employment requires the

Court’s consideration and resolution of this division.

ll. THE DUTY A PRIVATE SECTOR BUSINESSMAN OWED

TO HIS COMPETITOR IS AN ISSUE OF FIRST

IMPRESSION WHICH WARRANTS THIS COURT’S

CONSIDERATION

The court below found that a contractor had aright to have

private sector construction bids judged solely on the basis of

merit, quality and costs of service ard that a competitor’s

interference with that right constituted a scheme to defraud

his competitor, punishable under the mail fraud act. This

interpretation of 18 U.S.C. §1341 constitutes an

unprecedented expansion of the mail fraud statute into

private sector construction contracts.

it is important to note that in this instance, there is no

allegation that the petitioner in any way interfered with his

competitor’s employees or in any way defeated or interfered

with the opportunity of the competitor to submit a

competitive bid on the basis of the same information and

specifications upon which Venneri based his bid.

Rather, in this case, the allegation was merely that Venneri

did not disclose himself as being a potential bidder to Downs

of Mid-South Glass at the time that they met to go over the

specifications. After that meeting, and after the specifications

were established and the job scope was clarified, both Downs

and Strauss Glass had the opportunity to submit independent

bids through Austin-Westshore for the project. Venneri’s bid

was $40,500 lower than Mid-South’s bid.

On the basis of the nondisclosure to Mid-South that he was

a competitor, the court found that petitioner had defrauded

Mid-South of the opportunity to have its bid judged solely on

the basis of merit, quality and the costs of services.

No other court has held that a private sector general

contractor owes its prospective subcontractors a right to

have their bids judged solely on the competitive merits of the

competing bids, let alone find that a competing

subcontractor has violated federal criminal law by interfering

with that right.

The only cases relied upon by the court below with

respect to recognizing an obligation among competitors are

United States v. Castor, 558 F.2d 379 (5th Cir. 1977), cert.

denied, 434 U.S. 1010 (1978) and Gregory v. United States, 253

F.2d 104 (5th Cir. 1958). In each of those cases the defendant’s

10

fraudulent actions impacted on a significant public

interest. In Castor, the defendant not only defrauded

competing bidders for a limited number of government

issued liquor licenses but did so in a manner which

defrauded the licensing authority. By the use of false fronts

and sham identities, the defendant was able to secure a

disproportionate number of liquor licenses in violation of

the authority’s rules. Thus, not only were the competing

bidders defrauded but so was the city and the public’s

interests in diversity of the holders of liquor licenses.

In Gregory, the defendant was able to accomplish his

fraudulent scheme by subverting the postage system itself. By

using his position as a railroad postage clerk, defendant was

able to fraudulently back date postmark submissions for a

privately published newspaper which sponsored a college

football score prediction contest. In Gregory, the court

recognized that not only were the competing bidders

defrauded by this manipulative scheme, but so was the

contest sponsor who had a right to determine how it was he

wished to award the prizes. Furthermore, the manipulation

of the postage system directly impacts on the right of the

public to have a fair, reliable and efficient postal service.

Neither of those cases goes so far as to create a duty among

private sector contractors to insure that their competitor bids

are based upon the nebulous standards of merit, quality and

costs.

In this case, with access to the same information and.

equivalent specifications, petitioner’s bid was significantly

less than the supposedly defrauded competitor’s bid. By

artificially creating a duty among competitors out of whole

cloth, the court below would have required that Austin-

Westshore incur an additional $40,500 to complete the job.

Petitioner respectfully suggests that this Court should

examine the issue of whether a competitor should be

criminally punished under the mail fraud statute for violating

a competitor’s right to bid on mere quaiity cost of services

when such a violation did not interfere with the ability of the

competitor to prepare and submit a competitive bid on the

basis of equal information.

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11

CONCLUSION

The use of the mail fraud statute is ever expanding. This

case presents extremely important legal issues concerning

the permissible extent of federal criminal prosections to

enforce nebulous conceptions of business ethics. Such

expansion endangers the ability of the business community

to conduct its affairs without unneeded intervention from

the federal level. The Court of Appeals’ decisions give the

government free rein to impose their morality on the

business community. The petition for writ of certiorari should

be granted.

Respectfully submitted,

GEOFFREY P. GITNER

1800 K Street, N.W.

Suite 610

Washington, D.C. 20006

Counsel of Record

APPENDIX

Fit

er...

A-1

APPENDIX A

United States Court of Appeals

for the Fourth Circuit

No. 82-5341

Sy

S United States of America,

SS

&X>

Appellee

Vv.

& Joseph Venneri

Appellant

Appeal from the United States District Court for the District

of Maryland, at Baltimore. Herbert F. Murray, District Judge.

(Criminal Action No. 82-00188)

Argued: May 11, 1984 Decided: June 21, 1984

Before HALL and MURNAGHAN, Circuit Judges, and

YOUNG, District Judge.

Geoffrey P. Gitner (William F. Krebs, Scherr, Krebs & Gitner

on brief) for Appellant; Michael Schatzow, Assistant United

States Attorney (J. Frederick Motz, United States Attorney on

brief) for Appellee.

Honorable Joseph H. Young, United States District Judge for

the District of Maryland, sitting by designation.

YOUNG, District Judge.

Joseph Venneri was convinced on three counts of mail frid.

18 U.S.C. §1341. On appeal Venneri asserts that the trial judge

erred by: (1) improperly instructing the jury as to the

elements of a “scheme to defraud” an employer of the

honest and faithful services of its employee, (2) improperly

instructing the jury that competitors and potential

competitors had a right to compete for business on the basis

of merit, quality, and costs; and (3) excluding evidence of the

employee’s other corrupt practices offered to show that

defendant lacked specific intent and that there could be no

potential harm to the employer.

The government charged defendant with devising a

scheme (1) to defraud Marriott Corporation of the honest,

faithful and loyal performance of the duties and services of its

employee, Frederick Taylor; (2) to defraud Marriott of

money and things of value, to which it was entitled; and (3) to

defraud potential competitors of the opportunity to

compete for the business of performing as subcontractors in

construction of a Marriott hotel on the basis of merit, quality,

and cost. The government’s proof centered on defendant’s

payment for a piano delivered to Taylor, and Taylor’s

orchestration of a meeting between defendant and one of his

competitors for a Marriott hotel subcontracting job.

Defendant’s company was subsequently awarded the

subcontracting job.

Defendant contends that the trail court’s instructions

erroneously failed to “focus the jury’s attention on the need

to find that the defendant contemplated some kind of

pecuniary harm to the employer,” United States v. Lemire,

720 F.2d 1327, 1341 (D.C. cir. 1983), while leaving the jury with

A-3

the impression that deprivation of an employee’s honest

services alone constructed mail fraud. Defendant specifically

objects to instructions stating that Marriott’s right to the

honest and faithful performance of services and duties is “a

thing of value,” and that to act with intent to defraud means

to act with intent to deceive for the purpose of causing

“some financial or other loss to another.”

Initially, we note that defendant failed to raise properly his

objection to these instructions below. Our review is

therefore, limited to clear error. United States v. McGaskill,

676 F.2d 995 (4th Cir.), cert. denied, U.S , 103 S.Ct.

381, 74 L. Ed. 513 (1982)? In United States v. Shamy, we stated

that “(a)ny breach of fiduciary

Defendant did request an instruction which stated in relevant part: “if you

find from all the evidence that the defendant failed to disclose some

material information to the Marriott Corporation, in the (n) you may not

convict him unless you also find that this failure to disclose resulted in a loss

to the Marriott Corporation.” The instruction cited United States v.

McNeive, 536 F.2d 1245 (8th Cir. 1976) as authority. Without stating his

reasons, defendant objected to the trial court’s failure to give the

requested instruction.

We do not find that the requested instruction adequately raised the issue

on appeal below. The requested instruction went to the defendant’s, not to

the employer’s disclosure, and spoke in terms of loss, not the potential for

economic harm to the employer. Moreover, although the McNeive

decision notes that the record in that case did not reflect ‘‘any tangible or

pecuniary injury” suffered by the employer, it repeatedly speaks in terms

of “material misrepresentation.” 536 F.2d at 1251-52. In this case, the trial

court’s instructions referred to material nondisclosure as well as the need

to find that the defendant contemplated injury to Marriott. Under such

circumstances, the defendant failed to specify sufficiently his objections to

the charge. Fed. R. Crim. Proc. 30.

A-4

duty by a corporate employee effected in part by the use of

the mails may be violation of the federal mail fraud statute, at

least when accompanied by concealment or a failure to

disclose relevant material information.” 656 F.2d 951, 957 (4th

cir. 1981) (citation omitted), cert. denied, 455 U.S. 939 (1982).

In this case, the trial judge instructed the jury that Taylor had

a duty to disclose and not to conceal facts which were

“material to the decisions of the Marriott Corporation in

approving subcontractors,” and that if the jury found

beyound a reasonable doubt the Venneri and Taylor devised

a scheme in which Taylor would breach this duty, then it

could find “the defendant engaged in that scheme to

defraud the Marriott Corporate.” Since these instructions, as

well as the other instructions taken as a whole, follow our

statements regarding breach of fiduciary duty under the mail

fraud statute, we find no reversible error.

Defendant also argues that the extension of the mail fraud

statute to competitors is unprecedented and unjustified.

However, we find ample authority in the cases cited by the

government, for the application of the statute to the scheme

to defraud competitors as alleged in this case. See United

States v. Castor, 558 F.2d 379 (5th Cir. 1977), cert. denied, 434

U.S. 1010 (1978); Gregory v. United States, 253 F. 2d 104 (5th

Cir. 1958). We find no error in the jury instructions

concerning this issue.

Finally, defendant asserts that the trial judge erred in

refusing to admit evidence of Taylor’s other alleged corrupt

practices to show that Venneri lacked the reuisite intent and

to show that there was no potential harm to Marriott.

However, we find the evidence irrelevant for the purposes

advanced by defendant. Since defendant did not know of

Taylor’s other corrupt practices at the tine of the transaction

in this case, it can hardly serve to negate his intent. Moreover,

we do not accept defendant’s theory that such evidence is

A-5

relevant to show the Marriott could suffer no potential harm.

Under defendant’s theory, an employer could be defrauded

of its employee’s honest and faithful services only once; after

the first bride the employer would have nothing left of which

it could be deprived. Simply stated, that is not the law.

Accordingly, the judgment is

AFFIRMED