“I have run a business where we had to work within the lines,” said conservative Academy School District 20 Board of Education candidate Amy Shandy during an Oct. 4 candidate forum. “We didn’t get to ask the taxpayer for more money. We had to figure it out. Every single budget has room to be better, and we can do that.”

According to a lawsuit filed in April, Shandy’s business, the Shandy Clinic, which provides physical, speech, and occupational therapy to pediatric patients, “sent and collected fraudulent claims to Tricare, a federal health care provider that accounted for a significant portion of their revenue. In 2020, with the knowledge that Tricare was about to discover their illegal billing practices, Ty and Amy [Shandy] took their fraud to a new level by deciding to sell the assets of the Shandy Clinic to Buck Jack [LLC] at a grossly inflated value — a value that was derived directly from their [bald-faced] lie that their billing practices were legitimate and in compliance with federal law.”

Shandy (right) during an Oct. 4 candidate forum.

According to the complaint, the Shandys and Buck Jack began negotiations to transfer the business in 2019. In December 2020, Buck Jack learned that not only had the Shandy Clinic been under an audit from Tricare, but that Tricare had concluded as of September 28, 2020, that many of the Clinic’s prior billing practices were “illegal, fraudulent, and in violation of TRICARE requirements.”

Tricare is the worldwide health care program available to eligible beneficiaries of the seven uniformed armed services, and is a major part of the Military Health System. According to the complaint, Tricare sent the Shandys an “Education Letter” on August 22, 2017, notifying them that Tricare had in referred the issue of the Clinic’s billing practices to its Program Integrity Unit. On February 21, 2020, four months after the Shandys and Buck Jack entered into negotiations, Tricare’s Program Integrity Unit sent the Clinic a formal demand for an audit, noting that the request was “time sensitive and demanded a response within 14 days.” The letter required that the Clinic provide the complete medical files on 68 different patients relating to 82 different claims for treatment provided as early as 2017. It also required each person who claimed to have provided care to verify his or her licensure, and thereby attest to the treatment given. According to Buck Jack, the Shandy’s did not reveal this information during the sale process.

The Tricare audit found that the Clinic “had billed for services that had not been rendered; the Clinic had billed for services that were not reimbursable; the Clinic had misrepresented who had performed services; the Clinic misrepresented the length of time of services; and, these acts were fraudulent acts.”

As a result of the audit, the Shandy Clinic was placed under what Tricare calls “prepayment review,” which halts electronic submission and payment, and requires instead that each individual claim be personally reviewed by a Tricare auditor before it is even considered for payment. This consists of a manual review of every claim. 

According to the complaint, “given the thousands of claims that an average provider ordinarily submits, ‘Prepayment Review’ has the practical impact of significantly impeding the cash flow of a business, thereby threatening its ability to survive as a going concern.”

The complaint also notes that, “The Clinic’s bread and butter is providing health care designed for United States government health care programs. Its most significant revenue is from a program called Tricare, that serves members of the uniformed services. In 2020, Tricare accounted for approximately 30% of the Clinic’s revenue.”

Buck Jack paid just over $12 million to purchase the Shandy clinic.

Throughout the Shandys’ response to Buck Jack’s complaint, they claim that “defendants are without sufficient information to admit or deny the allegations” and that they “expressly deny all allegations of fraud.”

Shandy declined to comment on the active litigation, but in an email referred Buck Jack’s claims in the lawsuit as “unfounded allegations.”

Shandy’s campaign has been endorsed by the Colorado Springs Gazette, Colorado Board of Education members Steve Durham and Stephen Varela, Pastor Todd Hudnall of Radiant Church, and a number of Republican elected officials. Shandy has also received financial support from the Springs Opportunity Fund, a dark money organization with a history of supporting Republican candidates in regional elections.

Shandy isn’t the only D20 board candidate whose business affairs have come under legal scrutiny. In June, the Justice Department secured a settlement agreement with Mountain Prairie Holdings, a Colorado-based staffing agency. The settlement resolves the department’s determination that Mountain Prairie violated the Immigration and Nationality Act by discriminating against non-U.S. citizen workers when checking their permission to work in the United States.

“Demanding that workers provide more documentation than required by law to prove their permission to work causes unnecessary stress, financial hardship and obstacles to employment, especially for vulnerable workers,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division in a news release. “The Justice Department will continue to hold employers accountable for such discriminatory actions.”

According the LinkedIn, D20 Incumbent Will Temby has served as a managing partner for the company since 2011. Temby has been endorsed by the Colorado Education Association, former D20 Superintendent Tom Gregory, and others.

Review the Shandy court filings below: