SAN FRANCISCO (AP) _ A state appeals court that upheld the fraud conviction of Salvatore ''Bill'' Bonnano rejected a claim by the son of reputed Mafia boss Joseph Bonnano that he was the victim of discriminatory prosecution.

A 3-0 decision of the 1st District Court of Appeal on Friday upheld the 1985 conviction and four-year prison sentence of the younger Bonnano for cheating elderly residents out of $45,000 in a home improvement scheme.

Although another man, Anthony Insana, committed most of the acts in the scheme and was given immunity from prosecution for his testimony, the jury could well have concluded that Bonnano ''was often the motivating force behind Insana's 'rip-offs,''' said the opinion by Justice William Newsom.

The ruling also said Bonnano had failed to prove that authorities were out to get him because of his ''notorious family background.''

Prosecutors said Bonnano and Insana cooperated in a scheme to cheat customers of Insana's contracting company. The victims were homeowners, most of them elderly, who bought home improvement contracts.

Largely through the testimony of Insana, Bonnano was convicted of eight grand theft charges, involving $45,700 taken from four people between October 1977 and January 1978, and of conspiracy to commit grand theft. He was acquitted of 10 other grand theft charges.

The appeals judges rejected Bonnano's argument that the convictions were improperly based on the uncorroborated testimony of an accomplice, Insana. They also rejected Bonnano's claim that Insana should have been declared incompetent to testify because he was allegedly an alcoholic.