Community members have reacted with shock after learning that an employee of a longtime, family-owned Petaluma business was charged with embezzling more than $1 million from the local medical office supply company, much of which investigators are still trying to locate.

Bibbero Systems owner Mike Buckley said that the accused, 43-year-old John C. Sheehan of Rohnert Park, has been with his company for more than 15 years and had become a trusted employee.

"He was the nicest guy you'd ever want to meet but he apparently had us all bamboozled. Our employees were all distraught when they found out about it last week," said Buckley. "They were decimated. They all trusted him and thought they knew him well. His closest friends couldn't even begin to understand how he could do such a thing."

Buckley took over Bibbero Systems in 1972 and moved the San Francisco company to Petaluma ten years later. Locally, Bibbero is known as a family-owned company with a reputation for treating its customers and employees very well.

Petaluma resident Audrey Leytem-Whitbeck worked for Bibbero back in 1982 when the company first arrived in town and said she can still remember the positive environment the company provided.

"The company was tight-knit with employees who really seemed to care about one another," Leytem-Whitbeck said sadly. "It was a really wonderful environment to work in and I'm shocked that someone could take advantage of them like this."

A longtime customer of Bibbero's named Daniella Bonovitch-Goss said in a Facebook post that the company always provided wonderful customer service. "I am really sad to hear this. What a shame," she said.

According to lead investigating police detective Paul Gilman, Sheehan — whose original name is John Christopher Schoenthal — bilked Bibbero Systems out of more than $1 million and counting by creating a fake company in 2006 that billed Bibbero for office supplies, equipment and materials that were never provided to the business. Items billed to Bibbero included computers, laptops, servers, and other expensive office equipment that never made it to the company.

"Bibbero is a $30 million a year operation," Gilman said. "It looks like Sheehan basically doubled the IT orders for the company and pocketed the extra payments."

Sheehan allegedly cashed the checks in his name and used some of the money for a lavish home makeover that included multiple flat screen TVs, two Jacuzzi hot tubs and expensive home landscaping.

Petaluma police said that the embezzlement, which first began six years ago, was reported on July 26. Gilman called the scheme elaborate.

"This one was pretty well-though out," Gilman said. "He didn't steal from people who weren't intelligent; he stole from people who trusted him."

According to police, Sheehan was arrested on Aug. 2 and is being held in county jail on a $1 million bail. He has been charged with eight felony counts, including grand theft and possession of stolen property.

Sheehan appeared in court on Aug. 10 and pleaded not guilty to all charges.

According to Buckley, Bibbero Systems, which specializes in selling medical office files, paper charts and other supplies, has been struggling ever since medical offices began converting to electronic record keeping.

"It's terribly sad that a struggling company, that has been trying to keep employees as long a possible, has someone it trusts pull the rug out from underneath it," Buckley added somberly.

Buckley admitted that his trust for Sheehan clouded his better business judgment and that he allowed Sheehan to invoice the company for items without ever checking to make sure they had received the products.

"I can just tell you that I let my guard down," he said remorsefully. "Especially since we trusted the individual running our computer systems. It was an expensive lesson."

Investigators are still trying to locate any money Sheehan may have stashed and are hoping to force a restitution payment. Neither Gilman nor prosecutor Amy Ariyoshi would comment on how much embezzled money, if any, they have located.

"Certainly — at the conclusion of the case — if there are convictions we will be asking the court to award restitution from the defendant," said Chief Deputy Bill Brockley of the District Attorney's office. If convicted, Sheehan faces up to 12 years and eight months in prison.

(Contact Janelle Wetzstein at Janelle.wetzstein@arguscourier.com)