CA Mayor Charged With Church Fraud
Prosecutors say Tamara Wallace stole nearly $390,000 as bookkeeper
South Lake Tahoe Mayor Tamara Wallace is scheduled to appear in federal court Oct. 13, 2026, after prosecutors charged her with one count of wire fraud for allegedly stealing nearly $390,000 from Lake Tahoe Community Presbyterian Church.
Lake Tahoe Community Presbyterian Church in South Lake Tahoe, California (via Google Photos) / Insert of Tamara Wallace via LinkedIn
Federal court filings from the U.S. District Court for the Eastern District of California allege Wallace took money from the church from at least April 2019 through September 2025 while working as its bookkeeper.
Prosecutors say she directed reimbursement checks and electronic transfers to herself and used church funds for personal expenses, including rent and travel.
Wallace served as South Lake Tahoe mayor in 2021 and again in 2025. Federal prosecutors allege the theft scheme ran from at least April 2019 through September 2025, meaning the alleged conduct overlapped both of her mayoral terms.
The El Dorado County District Attorney’s Office sought federal prosecution, saying California sentencing laws could have resulted in little prison time in a state case. The FBI and U.S. Attorney’s Office then took up the investigation and prosecution, according to Reno TV station KOLO.
The alleged losses nearly forced the congregation to close, according to the federal filing. The church reduced programming, borrowed money to cover expenses, and incurred late fees and interest on overdue bills.
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Wallace is scheduled for arraignment Oct. 13, 2026. Court filings also request an Oct. 29 status conference and change-of-plea hearing before Chief U.S. District Judge Troy L. Nunley. Wallace has not yet entered a plea in the federal case, according to South Tahoe Now.
The charge comes roughly a year after Wallace publicly acknowledged taking money from the church.
In October 2025, Wallace wrote that she had taken funds from the Presbyterian congregation “over an extended period.” She also said the guilt and shame over taking the money led her to attempt suicide Sept. 11, 2025. She said she then spent 18 days in a mental health facility and continued receiving medication and intensive outpatient counseling afterward.
But church leaders disputed part of Wallace’s account of how the loss came to light.
In a statement issued to South Tahoe Now, the church’s Session, or board of directors, said church officials discovered Wallace’s actions and terminated her employment Sept. 26, 2025, before referring the matter to law enforcement.
“Tamara Wallace has formally acknowledged committing a significant offense against the congregation of Lake Tahoe Community Presbyterian Church,” the board said. “Our congregation has suffered extensive loss.”
The board also stressed that Wallace was an employee, not a church member or attendee.
Church attorney Philip Dunn said Wallace was not the first to report the missing money to the congregation, contradicting her claim that she had effectively turned herself in.
Wallace resigned as mayor and from the South Lake Tahoe City Council on Oct. 13, 2025. In its official FAQ addressing Wallace’s resignation, the city emphasized that the allegations involved Wallace’s private employment and did not involve municipal money.
Earlier insurance cases
El Dorado County Superior Court records reviewed by MinistryWatch show Wallace had also been involved in two earlier civil cases with Federal Insurance Company.
Federal Insurance filed Federal Insurance Co. v. Tamara L. Wallace on April 21, 2006. The court’s surviving electronic docket identifies Wallace as the defendant and categorizes the case as a civil tort matter but does not describe the underlying allegations.
Later records say Wallace agreed in 2006 to repay Federal Insurance $122,193.16 through a promissory note that described the obligation as arising from a “theft of funds.” Available court records do not identify whose money was taken, establish the circumstances surrounding the loss, or show whether Wallace was criminally charged in connection with the matter.
Federal Insurance returned to court on April 20, 2021, filing a breach-of-contract case against Wallace.
The El Dorado County Superior Court docket shows the court entered judgment for Federal Insurance and against Wallace for $110,834.56 on June 13, 2022. The lawsuit sought the unpaid balance from the earlier repayment arrangement.
The older cases could raise questions about what information was available before Wallace was given access to the church’s finances. Pastor Greg Hughes told the Sacramento Bee that the church ran a background check on Wallace before hiring her, but it did not reveal her prior financial troubles.
Wire fraud carries a maximum statutory penalty of 20 years in federal prison and a $250,000 fine.
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