Weakened by starvation, dehydration and abuse, 5-year-old Amy Shipley threw up a force-fed concoction of canned milk and black pepper and choked to death on her own vomit last fall.

Counselors, court officers and welfare workers saw signs of abuse in the Shipley home for two years, but various public services designed to protect children failed to shield her."There was a big breakdown in the system," said Robert Hanlon, Amy's maternal grandfather who's seeking custody of her two sisters.

Amy's father and stepmother were not called to account until after she died Nov. 8. Dr. Gary D. Shipley and his wife, Gloria Anne, both 35, were charged with murder and neglect of a dependent.

Both have pleaded not guilty and are being held without bail pending an Aug. 5 trial. If convicted, they face up to 80 years in prison.

A court-imposed gag order has silenced police, defense lawyers and prosecutors. But testimony from more than 20 witnesses in a series of bond hearings sketched out the Shipleys' lives since 1988. Some of the most damning testimony came from Shipley's eldest daughter, 8-year-old Danielle.

Over the 21/2 years, during which the family moved three times, welfare officials removed Danielle from the Shipleys' home, and a grand jury was convened to investigate allegations of abuse.

But nothing happened.

Danielle was returned. The grand jury issued no indictments. And Shipley, a surgeon whose medical license was in jeopardy, kept it under the terms of a 20-year probation.

"There is no question this guy was protected by the system. I do feel the standard applied to him, because he was a doctor, was different than if he had another profession," said Jerry McGaughey, the former Knox County prosecutor who took the case to the grand jury.

One of the first people to suspect something was wrong was Patricia A. Bell, Danielle's kindergarten teacher in Vincennes, a town in southwestern Indiana. Danielle was enrolled in Bell's class after the family moved there from Indianapolis in 1988.

The Shipleys married earlier that year after he divorced his first wife, Rhonda, the mother of Danielle, Amy and Krista, now 3. Rhonda Shipley has refused to cooperate with investigators or talk to reporters.

Danielle did well in school until her parents withdrew her for several weeks early in 1989, Bell testified. The child returned bruised and battered, saying her father had struck her and forced her to take cold showers, sleep in the basement and drink liquid soap, the teacher said.

"Why am I so bad, Mrs. Bell?" Danielle asked.

Knox County welfare officials removed Danielle from her home but returned her two weeks later after her father and stepmother promised to seek counseling and stop paddling her.

Principal William Ritterskamp, calling it "the clearest case of child abuse I've ever seen," urged the prosecutor's office to investigate.

In the meantime, the Shipleys moved to Jasper, about 40 miles from Vincennes. Shipley resumed his medical practice and arranged to enroll Danielle in a private school.

A grand jury, which convened in the summer 1989, handed up no indictments after receiving assurances that authorities would supervise the family.

However, Knox Superior Court Judge Edward Theobald had already ended Welfare Department control of Danielle's case. Theobald said he had been told the Shipleys were no longer a threat.

Counselor Daniel Jackson, who had given that assurance, testified that he learned only later that the Shipleys may have been abusing prescription drugs.

"It was apparent to me the Shipleys were not honest with me about their drug addiction," he said.

Yet a year before, Gloria Anne Shipley's nursing license was suspended after she failed to complete a drug detoxification program, said Barbara Powers, director of the Indiana Nursing License Board.

And in 1990, the Indiana Medical Licensing Board imposed the 20-year probation on Shipley. A report said Shipley entered a program for doctors with drug problems.

Medical board director Louis Belch had no power to investigate Shipley's home life. "I don't know what we could have done differently," he said.

Theobald, too, worries he's been made a scapegoat. "I'm getting blamed for state welfare department policy and Knox County Department of Public Welfare policy that I didn't have anything to do with," he said.

In late summer 1990, the Shipleys moved again, 200 miles north to Lake County, near Chicago. The family lived in a motel, returned briefly to Indianapolis, then returned to Lake County and moved into a two-story home, investigators say.

Earlier this month, Danielle, now in foster care with Krista, testified in detail about abusive punishments inflicted on Amy by both parents.

Amy was forced to sleep in a locked bathroom as punishment for wetting her pants and stealing food, Danielle said. Amy was beaten with a belt and a hairbrush, and fed milk laced with pepper, she said. A coroner's report showed that Amy died by choking on her own vomit.

During Danielle's testimony, the Shipleys sat across the courtroom, listening stoically.

After their arrests, Shipley blamed his wife, saying she threatened to leave him when he questioned her treatment of the children.

"I really loved Gloria," Shipley told investigators. "I believed deep down inside that she loved the kids and me, too."

Gloria Anne Shipley has declined to point the blame.

"I realize that Amy was spanked harder than I was when I was a child," she told an investigator. "But there were so many things going on that I just didn't think. I didn't allow myself to think about how hard she was being beaten."