UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 03-7204

UNITED STATES OF AMERICA,

Plaintiff - Appellee,

versus

DAVID HUNTER MAUNEY, III,

Defendant - Appellant.

Appeal from the United States District Court for the Middle

District of North Carolina, at Durham. William L. Osteen, District

Judge. (CR-97-251; CA-97-251-1-1)

Argued: March 16, 2005 Decided: April 20, 2005

Before LUTTIG, WILLIAMS, and GREGORY, Circuit Judges.

Affirmed by unpublished per curiam opinion.

ARGUED: William King Hoyt, Winston-Salem, North Carolina, for

Appellant. Douglas Cannon, Assistant United States Attorney,

OFFICE OF THE UNITED STATES ATTORNEY, Greensboro, North Carolina,

for Appellee. ON BRIEF: Anna Mills Wagoner, United States

Attorney, Robert M. Hamilton, Assistant United States Attorney,

Greensboro, North Carolina, for Appellee. 

Unpublished opinions are not binding precedent in this circuit.

See Local Rule 36(c).
1

The evidence presented at sentencing supported the district

court’s finding that Mauney actually received more than $1,000,000

in kickbacks during his tenure as the head of cotton purchasing for

Sara Lee. Nonetheless, the indictment alleged that Mauney received

$285,759 in kickbacks. 

2

PER CURIAM:

David Mauney appeals from the denial of his 28 U.S.C.A. § 2255

(West Supp. 2004) motion, which alleged that his appellate counsel

rendered constitutionally ineffective assistance by failing to

argue that an intervening Supreme Court decision rendered the

indictment and jury instructions in his case defective. Because

Mauney was not prejudiced by the alleged failing of his appellate

counsel, we affirm. 

I.

The underlying criminal charges against Mauney arose out of

his employment as the head of cotton and yarn purchasing for Sara

Lee Knit Products, Inc. (Sara Lee). As part of his

responsibilities, Mauney was charged with procuring cotton from

Sara Lee’s vendors at the price most advantageous to Sara Lee.

Unbeknownst to Sara Lee, Mauney received at least $285,759, more

than double his annual salary, from these vendors between October

11, 1992 and August 8, 1994.1

Sara Lee required all of its executives to file annual

disclosure statements to help Sara Lee identify and address

conflicts of interest. On his disclosure form, Mauney represented
2

Mauney used several shell corporations and straw men so that

his activities would remain undetected.

3

that he had received no payments in excess of two hundred dollars

from any of Sara Lee’s suppliers, and he disavowed having any

interest in or being affiliated with “any vendor, purchaser or

competitor” of Sara Lee.(J.A. at 75.)

On October 27, 1997, Mauney was indicted for mail fraud in

violation of 18 U.S.C.A. §§ 1341, 1346 (West 2000 & Supp. 2004),

wire fraud in violation of 18 U.S.C.A. §§ 1343, 1346 (West 2000 &

Supp. 2004), money laundering in violation of 18 U.S.C.A. § 1957

(West 2000),2

 and conspiracy to commit fraud and money laundering

in violation of 18 U.S.C.A. § 371 (West 2000). The indictment

alleged that Mauney had perpetrated a scheme to defraud Sara Lee of

its money, property and its right to the honest services of Mauney

by virtue of his misrepresentations on Sara Lee’s disclosure form.

The indictment did not allege, however, that Mauney’s

misrepresentations were material. 

 At his trial, Mauney did not deny that he received large

payments from Sara Lee’s vendors, but testified that the payments

were “consulting fees” for services that he provided to the vendors

on nights and weekends. Mauney argued that the evidence showed

that he had no intent to defraud Sara Lee when he made his false

disclosure statements because the payments he received did not harm

Sara Lee. Instead, Mauney argued, he had always procured cotton at
4

the lowest possible price and had made millions of dollars in

profits for Sara Lee. In contrast, the Government argued that, as

the indictment alleged, Mauney had forced vendors to pay him

kickbacks as a quid pro quo for the award of cotton contracts. 

The district court instructed the jury, in part, as follows:

[A] scheme to defraud includes any scheme to deprive

another of money, property, or of the intangible right to

honest services by means of false or fraudulent

pretenses, representations or promises.

A representation may be false when it constitutes a

half truth, or effectively conceals a material fact,

provided it is made with intent to defraud.

(J.A. at 563.) The jury convicted Mauney on all counts on July 24,

1998. On May 21, 1999, the district court sentenced Mauney to

seventy-eight months of imprisonment. The district court entered

its judgment of conviction on June 10, 1999.

On that same day, the Supreme Court issued its opinion in

Neder v. United States, 527 U.S. 1, 25 (1999), which held that

materiality is an element of the federal crimes of mail, wire and

bank fraud. Id. at 25. Prior to Neder, the Government was not

required to prove materiality as an element of mail and wire fraud

in this circuit. See, e.g., United States v. ReBrook, 58 F.3d 961,

966 (4th Cir. 1995). 

Believing that Neder significantly raised his chances of

prevailing on appeal, Mauney notified his attorney of the decision.

Despite this notification, Mauney’s counsel failed to read Neder

before filing his opening brief on appeal. Indeed, Mauney’s
5

counsel did not raise Neder in a written filing with this court

until he filed a motion to file a rehearing petition out of time,

after we had already affirmed Mauney’s conviction and sentence. 

Mauney then filed a § 2255 motion, alleging, inter alia, that

his attorney rendered constitutionally ineffective assistance by

failing to argue on appeal that Mauney’s indictment and jury

instructions were defective in light of Neder. After holding an

evidentiary hearing, a magistrate judge recommended that the

district court deny Mauney’s motion. The district court adopted

the magistrate judge’s report and recommendation. We granted

Mauney a certificate of appealability, and we have jurisdiction

under 28 U.S.C.A. § 2253 (West Supp. 2004). When reviewing a

district court’s judgment on a § 2255 motion, we review factual

findings for clear error and legal conclusions de novo. United

States v. Cheek, 94 F.3d 136, 140 (4th Cir. 1996).

II.

To establish a claim for ineffective assistance of counsel, a

defendant must show, first, that his counsel’s performance was

deficient and, second, that the deficiency prejudiced him.

Strickland v. Washington, 466 U.S. 668, 687 (1984). Under

Strickland’s “performance” prong, the defendant must demonstrate

that his counsel’s performance “fell below an objective standard of

reasonableness” determined by comparison to “prevailing
3

Because we conclude that Mauney has conclusively failed to

show that he was prejudiced by his counsel’s alleged failing, we

need not decide whether Mauney’s counsel was objectively

unreasonable when he failed to raise Neder on direct appeal. See

Strickland v. Washington, 466 U.S. 668, 694 (1984).

6

professional norms.” Id. at 688. In addition, the defendant must

show under Strickland’s “prejudice” prong that “there is a

reasonable probability that, but for counsel’s unprofessional

errors, the result of the proceeding would have been different.”

Id. at 694. If the defendant conclusively fails to demonstrate

sufficient prejudice from certain acts or omissions, the court need

not decide whether counsel’s performance was, in fact, deficient

under Strickland. See id. at 697.

The only claim Mauney raises in this appeal is that his

appellate counsel was ineffective for failing to argue that his

indictment and jury instructions were defective under Neder. Thus,

Mauney must show that his appellate counsel’s failure to raise

Neder was objectively unreasonable3 and that, but for his counsel’s

deficient performance, there is a reasonable probability that his

appeal would have succeeded. Because Mauney did not object to

either the jury instructions or his indictment in the district

court, Mauney must show that there is a reasonable probability

that, had his attorney made those challenges on appeal, we would

have found reversible plain error. 

Under plain error review, which is authorized by Fed.R.Crim.P.

52(b) (West Supp. 2004), federal appellate courts have only “a
7

limited power to correct errors that were forfeited because [they

were] not timely raised in [the] district court.” United States v.

Olano, 507 U.S. 725, 731 (1993) (citing Fed.R.Crim.P. 52(b)). An

appellate court may not correct an error the defendant failed to

raise in the district court unless there is: “(1) error, (2) that

is plain, and (3) that affects substantial rights.” United States

v. Cotton, 535 U.S. 625, 631 (2002) (internal quotation marks

omitted). “If all three conditions are met, an appellate court may

then exercise its discretion to notice a forfeited error, but only

if (4) the error seriously affects the fairness, integrity, or

public reputation of judicial proceedings.” Id. (internal quotation

marks omitted). 

An indictment that fails to charge an element of the offense

of conviction does not seriously affect the fairness, integrity, or

public reputation of judicial proceedings if there is

“overwhelming” and “essentially uncontroverted” evidence of the

missing element. Id. at 633 (quoting Johnson v. United States, 520

U.S. 461, 470 (1997)). Similarly, when the district court fails to

charge the jury on an element of the offense of conviction, we will

not notice the error if the evidence would “permit no other

conclusion” and the defendant’s conviction “was inevitable” under

the correct jury instruction. United States v. Cedelle, 89 F.3d

181, 186 (4th Cir. 1996); see Johnson, 520 U.S. at 470.
4

Of course, given the state of the law at the time of Mauney’s

trial, we do not fault the district court or trial counsel for

failing to recognize these errors. Nonetheless, because Neder

issued while Mauney’s case was still pending on direct review, we

would have applied it in Mauney’s case. See Griffith v. Kentucky,

479 U.S. 314 (1987); Johnson v. United States, 520 U.S. 461, 468

(1997) (holding that if “law at the time of trial was settled and

clearly contrary to the law at the time of appeal” a district court

ruling contrary to the law at the time of appeal is a plain error).

8

To determine whether Mauney was prejudiced by his appellate

counsel’s failure, we first must determine whether the challenged

indictment and jury instructions were plainly erroneous. In Neder,

the Supreme Court held that “materiality is an element of the

federal mail fraud, wire fraud, and bank fraud statutes.” 527 U.S.

at 4. Thus, to be guilty of federal mail fraud, wire fraud, or

bank fraud, a defendant must have “misrepresent[ed] or conceal[ed]

[a] material fact.” Id. at 22. A fact is material “if it has a

natural tendency to influence or is capable of influencing” the

intended victim. Id. at 16 (alteration and internal quotation

marks omitted). 

In this case, Mauney was alleged to have falsely represented

to Sara Lee that he was not receiving payments from Sara Lee’s

vendors as part of his scheme to defraud Sara Lee. Thus, under

Neder, Mauney could not be found guilty of mail fraud or wire fraud

unless the fact that he was receiving substantial payments from

Sara Lee’s cotton vendors was material. Accordingly, the district

court’s failure to instruct the jury on materiality and the

indictment’s failure to allege materiality were plain errors.4
9

Nonetheless, if the evidence of the materiality of Mauney’s

misrepresentation was “overwhelming” and “essentially

uncontroverted,” we would not have noticed the plain errors in

Mauney’s indictment and jury instructions on direct appeal, because

the errors would not have “seriously affect[ed] the fairness,

integrity, or public reputation of judicial proceedings.” Cotton,

535 U.S. at 632-33; Cedelle, 89 F.3d at 186. Thus, if it was

absolutely clear from the record that Sara Lee was “capable of

[being] influenc[ed],” Neder, 527 U.S. at 16, by Mauney’s

misrepresentation, we would have affirmed Mauney’s conviction.

Cotton, 535 U.S. at 633; Johnson, 520 U.S. at 470.

We think it beyond serious dispute that a company is capable

of being influenced by knowledge of the fact that its purchasing

agent is receiving large kickbacks from suppliers. In such a

situation, the company would naturally suspect that it would be

getting a lower price absent the kickbacks. Certainly, any

rational employer that discovers that an employee in charge of

purchasing is earning more money from kickbacks than from his

salary will have a “natural tendency” to put someone else in charge

of purchasing and investigate the employee’s conflict of interest.

Given that Mauney admitted to receiving over a quarter of a million

dollars in payments from Sara Lee’s vendors, we conclude that the

evidence of the materiality of his misrepresentation was

“overwhelming” and “essentially uncontroverted.” Cotton, 535 U.S.
5

The Government argues that Mauney’s jury instructions were

not defective because the district court charged the jury that “[a]

representation may be false when it constitutes a half truth, or

effectively conceals a material fact.” (J.A. at 563 (emphasis

added).) Considering the instructions as a whole, however, it is

clear that the jury could have convicted Mauney if it found any of

the following: (1) Mauney had “effectively conceal[ed] a material

fact”; (2) Mauney had made a half-true representation; or (3)

Mauney had made any other “false or fraudulent pretenses,

representations or promises.” (J.A. at 563.) Accordingly,

Mauney’s jury instructions did not require the jury to find that

any false representations related to a material fact, as is

mandated by Neder.

10

at 631. Accordingly, we would not have noticed the defect in

Mauney’s indictment had his attorney raised it on direct appeal,

because the defect did not “seriously affect[] the fairness,

integrity, or public reputation of judicial proceedings.” Id. at

632-33. Similarly, we would not have noticed the defect in

Mauney’s jury instructions5 because the evidence would “permit no

other conclusion” than that the kickbacks were material, and

Mauney’s conviction “was inevitable” under proper jury

instructions. Cedelle, 89 F.3d at 186. Accordingly, Mauney was

not prejudiced by his counsel’s failure to challenge the indictment

and jury instructions under Neder on direct appeal, and the

district court properly denied Mauney’s § 2255 motion.

As the kickbacks in this case were undisputedly large, Mauney

could not credibly argue that the payments he received involved

immaterial sums that were incapable of influencing Sara Lee’s

decision to retain him and continue entering into contracts tainted

by his conflicts of interest. Recognizing this weakness in his
11

position, Mauney instead argues that the absence of a materiality

instruction prejudiced him by allowing the jury to convict him

solely on the basis of his breach of Sara Lee’s conflict-ofinterest policy and without finding that the kickbacks harmed Sara

Lee economically. Because of the absence of a materiality

instruction, Mauney’s argument goes, the jury could expansively

interpret the deprivation of honest services to include any and all

violations of company policy. This argument misinterprets the

change in law wrought by Neder and its application in Mauney’s

case.

Under the district court’s instructions, to convict Mauney of

mail and wire fraud, the jury needed to conclude that Mauney

intentionally devised a scheme to defraud Sara Lee, and that Mauney

used the mails and interstate wires for the purpose of executing

the scheme. The court also instructed the jury that a “scheme to

defraud” was one that sought to “deprive another of money,

property, or of the intangible right to honest services by means of

false or fraudulent pretenses, representations or promises.” (J.A.

at 563.) Thus, the jury’s guilty verdict necessarily included the

following findings: (1) Mauney intentionally devised a scheme; (2)

Mauney’s scheme sought to deprive Sara Lee of money, property, or

of the intangible right to honest services; and (3) the scheme

utilized false or fraudulent pretenses, representations or promises

to accomplish the deprivation. The false representation charged in
12

the indictment was Mauney’s statement that he was not receiving

payments from Sara Lee’s vendors. The only additional finding

necessary under Neder was that the fact Mauney misrepresented, i.e.

his receipt of the kickbacks, was material to the deprivation that

his scheme sought to accomplish.

In other words, the jury found that Mauney intended to deprive

Sara Lee of money, property or honest services. To that end,

Mauney devised a scheme that relied, in part, on his false

representation that he was not receiving payments from Sara Lee’s

vendors. So long as Sara Lee’s decision whether to part with

money, property, or honest services might have been different if

Sara Lee had known that Mauney was receiving kickbacks, the fact

that Mauney misrepresented was material. Thus, Mauney’s assertion

that the jury could have convicted him solely on the basis of his

breach of Sara Lee’s conflict of interest policy does not relate to

the materiality of his misrepresentation, but instead it relates to

what the jury could have found constituted a deprivation as the

object of his scheme. Accordingly, even if Mauney were correct

that the jury could have convicted him based solely on his

violation of Sara Lee’s conflict of interest policy, he is mistaken

that this result obtains from the district court’s failure to

charge materiality. 

In essence, Mauney’s prejudice argument is nothing more than

a lamentation that the district court failed to define “honest
6

Although Mauney alleged in his 28 U.S.C.A. § 2255 (West Supp.

2004) motion that his attorney was ineffective for failing to

object to the district court’s failure to instruct the jury that an

employee deprives his employer of honest services only when he

“breach[es] a fiduciary duty, and . . . foresaw or reasonably

should have foreseen that his employer might suffer an economic

harm as a result of the breach,” United States v. Vinyard, 266

F.3d 320, 327 (4th Cir. 2001), he has not pursued that claim on

appeal. In his opening brief, the only defective performance

claimed by Mauney is his counsel’s failure to raise Neder on direct

appeal. Accordingly, we do not address whether Mauney’s counsel

performed deficiently by failing to object to or appeal from the

district court’s lack of a precise definition of “honest services,”

or whether Mauney was prejudiced thereby.

13

services” more precisely in its charge to the jury.6 But Neder did

not even discuss the meaning of “honest services” as used in 18

U.S.C.A. § 1346, let alone restrict its meaning in the way Mauney

advocates. Thus, even if counsel had appealed the district court’s

failure to charge the jury that Mauney’s misrepresentation had to

be material under Neder, we would not have had occasion to consider

whether the district court should have defined honest services more

precisely in its jury instructions. Accordingly, the “prejudice”

that Mauney complains of did not result from the deficient

performance he challenges, i.e., his attorney’s failure to appeal

the lack of a materiality instruction under Neder. Because, as we

noted above, knowledge of the fact that Mauney was receiving

kickbacks unquestionably was “capable of influencing” Sara Lee’s

decision to part with its money, property, or intangible right to

honest services, we would have affirmed Mauney’s conviction and

sentence even if Mauney had raised Neder on direct appeal. Because
14

Mauney was not prejudiced by the alleged failing of his appellate

counsel, we affirm.

III.

Because Mauney’s appeal would have been unsuccessful even if

his attorney had challenged Mauney’s indictment and jury

instructions under Neder, Mauney was not prejudiced by the

deficient performance of which he complains in this appeal.

Accordingly, we affirm the district court’s denial of Mauney’s

§ 2255 motion.

 AFFIRMED