Assistant U.S. Attorneys Gary Glazer and Ann Campbell said Mandell evaded nearly $40,000 in taxes in 1983 and 1984 by failing to report as income nearly $200,000 the Freshie Co. spent on renovations to Mandell's 18th-century home on Delancey Street near Front in Society Hill.
Mandell also aided in the preparation of fraudulent corporate tax returns related to the same work, the prosecutors said.
In trial testimony, Mandell said he instructed his top man at Freshie, Anthony Pili, to charge the bills to his loan account so he could repay them later, and assumed this instruction had been carried out when it hadn't.
"I told him (Pili) that these invoices would be coming . . . and I told him to apply this money . . . to my loan account," Mandell testified.
Pili, who pleaded guilty in 1986 to paying bribes to employees of the Philadelphia School District to get lucrative lunch contracts for Freshie, died late last year.
Pili had told the FBI several years ago that Mandell intended to repay the money spent on the renovations, and Pili's statement had been included in an FBI report.
But the judge refused to let the jury hear this, defense attorney William B. Lytton complained, contending the adverse ruling might turn out to be "the key issue in the case."
Mandell also denied telling contractors who worked on his house to make it appear on invoices that the work had been done at Freshie.
But the general contractor, Robert E. Lipschutz, 62, testified that Mandell instructed him to submit phony invoices.
A number of character witnesses, including former Philadelphia Eagles coach Dick Vermeil, City Councilman Thacher Longstreth, and Arlin M. Adams, a former federal judge, told the jury that Mandell had an outstanding reputation.
