The Supreme Court decision that led to the reversal of the decade-old conviction of former Maryland governor Marvin Mandel has also jeopardized scores of other prosecutions and convictions of corrupt public officials and private citizens.

The high court's ruling in June could affect at least 185 convictions and 100 more cases under investigation, and that estimate is conservative, said Gerald E. McDowell, chief of the Justice Department's Public Integrity Section.

The decision severely restricted the reach of the federal mail fraud law, enacted by Congress in 1872 "to prevent the frauds which are mostly gotten up in the large cities . . . by thieves, forgers, and rapscallions generally, for the purpose of deceiving and fleecing the innocent people in the country."

In recent years, the law, which prevents the use of the mails in any "scheme or artifice to defraud," has been a favorite tool of federal prosecutors. They have used mail fraud and its modern-day companion, wire fraud, as a means of punishing conduct that looks wrong yet may not be explicitly prohibited under other federal statutes.

The theory -- accepted by all the lower courts to consider it, including the appeals court in the Mandel case -- had been that, in the case of public officials who abused their trust, citizens have been defrauded of their "intangible rights" to honest and impartial government. Likewise, private individuals have been convicted of mail or wire fraud for violating their fiduciary duty to their employers or unions.

The rule among prosecutors has been, "When in doubt, charge mail fraud," said Columbia University law professor John C. Coffee Jr. "If it didn't fit in to the clear pigeonholes of other statutes, you charged mail fraud and charged generally a scheme to defraud the public of the faithful and honest services of public officials."

The Supreme Court's 7-to-2 ruling in McNally v. U.S. ended all that.

In an opinion by Justice Byron R. White, the court held that federal prosecutors must show that the fraud caused actual economic injury, not just intangible harm.

The ruling came in the case of James E. Gray, cabinet secretary to then-Gov. Julian M. Carroll of Kentucky, and Charles J. McNally, a Kentucky businessman, who participated in a scheme to funnel commissions on state insurance business to an agency nominally owned by McNally but in fact controlled by Gray and another Kentucky politician.

"Rather than construe the statute in a manner that leaves its outer boundaries ambiguous and involves the federal government in setting standards of disclosure and good government for local and state officials, we read {the mail fraud law} as limited in scope to property rights," White wrote.

The opinion prompted an outraged dissent by Justice John Paul Stevens. "Can it be that Congress sought to purge the mails of schemes to defraud citizens of money but was willing to tolerate schemes to defraud citizens of their right to an honest government, or to unbiased public officials?" Stevens asked in an opinion joined by Justice Sandra Day O'Connor.

McNally's lawyer, Carter Phillips, termed the ruling "about as good news as defense lawyers have had in 10, 15 years."

Assistant Attorney General William F. Weld, head of the Justice Department's criminal division, called McNally "a real kick in the teeth" and said he had heard "yelps from all over" the country as U.S. attorneys assessed the damage to convictions and pending prosecutions.

In the aftermath of the decision, the effect of which is considered retroactive:The Supreme Court last month vacated the conviction of former Cook County, Ill., circuit judge Reginald Holzer, sentenced to 18 years for mail fraud, extortion and racketeering in the Operation Greylord scandal. The high court returned the case to a federal appeals court in Chicago for reconsideration in light of the McNally decision, which could also imperil nine other Greylord convictions.Prosecutors in New York dropped several fraud counts against Rep. Mario Biaggi (D-N.Y.) and three others in a case involving charges that the Wedtech Corp. bribed public officials to help obtain miltiary contracts.Lawyers for former Wall Street Journal reporter R. Foster Winans and two others convicted in an insider trading scheme to profit through advance tips about contents of the Journal's Heard on the Street column argued in the Supreme Court last month that -- under the reasoning in McNally -- their fraud involved only intangible harm and that therefore their convictions should be overturned.

Solicitor General Charles Fried contended that McNally did not apply because "property was misappropriated here" in the form of information belonging to the Wall Street Journal.A federal judge in New York dimissed 46 of 54 mail and wire fraud counts in a major Iran arms-smuggling case against 10 international businessmen accused to conspiring to ship more than $2 billion in arms to Iran.

"The kinds of cases that are going to go down the tubes I would call abuse of power cases, where people like Gov. Mandel sold his power," said G. Robert Blakey, a law professor at Notre Dame. Mandel "didn't cheat on a particular contract. Nobody lost anything. The state gained the revenue. Who lost in the old-fashioned tangible sense? The answer is nobody. But the government was for sale."

Not all convictions challenged on the basis of McNally have been overturned. In Philadelphia, a federal judge last month rebuffed an attempt by former city commissioner Maurice Osser, found guilty in 1972 of a scheme to take kickbacks from a printing contractor, to win a new trial. The judge said Osser failed to raise the issue earlier and that giving him a new trial "at such a late date . . . would create a manifest injustice to the city of Philadelphia and its citizens."

Rep. John Conyers Jr. (D-Mich.), chairman of a House Judiciary subcommittee on criminal justice, has introduced legislation to undo the McNally decision. The Justice Department, meanwhile, is embroiled in an internal dispute over what, if any, legislation to propose. While a number of federal prosecutors and others are arguing for legislation that would directly overrule the case, some top department officials cite principles of federalism and question the advisability of that approach, department sources said.

In the meantime, said Associate Attorney General Stephen S. Trott, "it's a severe blow." The law "has been used successully and effectively by federal prosecutors against corrupt politicians," he said. Without any hint of trouble from the Supreme Court, "we thundered ahead in lots and lots of cases."

Now, he said, "We really have a lot of repair work that has to be done."