SOUTH LAKE TAHOE, Calif. — Former South Lake Tahoe Mayor Tamara Le Ann Wallace faces a federal wire fraud charge alleging she embezzled nearly $390,000 from Lake Tahoe Community Presbyterian Church over more than six years.
The charge, filed Tuesday in federal court in the Eastern District of California, represents the first formal criminal charge against Wallace nearly one year after the financial scandal became public.
According to the charging document reported by South Tahoe Now, prosecutors allege Wallace carried out a scheme beginning no later than April 2019 and continuing through about September 2025. The alleged scheme involved reimbursement checks made payable to Wallace and electronic transfers of church funds to herself.
Prosecutors allege Wallace used the money for personal expenses, including travel and rent.
The filing alleges the scheme nearly forced the church to close. According to the charging allegations, Lake Tahoe Community Presbyterian Church reduced programming and took out loans to cover expenses, late fees and interest on overdue bills.
“The purpose of the scheme and artifice to defraud was for Wallace to unlawfully enrich herself by embezzling hundreds of thousands of dollars from Church 1.”
That language comes from the federal charging document, as quoted in the Sept. 15 report by South Tahoe Now. The church is identified as “Church 1” in the federal document.
Investigation stretched nearly a year
The case began publicly unfolding in October 2025, when Wallace acknowledged in a letter to local news organizations that she had taken money from the Presbyterian church, where she worked as a bookkeeper.
At the time, Wallace wrote that she had taken funds “over an extended period” and said she intended to repay the money and accept the consequences of her actions.
The church subsequently disputed part of Wallace’s account regarding how the theft was discovered. Church attorney Philip Dunn told South Tahoe Now that Wallace did not report the theft to the church and that the matter was discovered by church officials before her employment was terminated. The church said Wallace’s employment ended Sept. 26, 2025, and that the matter was referred to law enforcement.
The investigation involved the South Lake Tahoe Police Department, the El Dorado County District Attorney’s Office and the FBI before the matter reached federal prosecutors. The South Lake Tahoe Police Department referred the investigation to the District Attorney’s Office because of a conflict of interest.
The El Dorado County District Attorney’s Office previously confirmed that it was handling the investigation but declined to discuss details while it remained active.
Wallace resigned from City Council
Wallace’s criminal case concerns money allegedly taken from her private employer, not the city of South Lake Tahoe.
Wallace resigned from the South Lake Tahoe City Council on Oct. 13, 2025, after her admission became public and pressure mounted for her to leave office.
South Lake Tahoe officials subsequently emphasized that the alleged financial misconduct did not involve city funds.
In an October 2025 council report, city officials stated that South Lake Tahoe remained “stable, operational, and financially sound” and that the Wallace matter involved her private employment rather than city finances.
Wallace had served on the City Council since 2018 and had served multiple terms as mayor, including during the 2021 Caldor Fire evacuation. She was selected as mayor again in December 2024 before the scandal forced her resignation the following year.
Federal charge carries significant potential penalties
Wire fraud is prosecuted under 18 U.S.C. § 1343. The statute provides for a maximum sentence of up to 20 years in federal prison, along with potential fines and supervised release. The precise penalties in any eventual sentencing would depend on the circumstances of the case and applicable federal sentencing rules.
The filing of a criminal charge is an allegation, not a finding of guilt. Wallace is presumed innocent unless and until proven guilty in court.
Wallace retained former judge and criminal defense attorney Steven C. Bailey in October 2025. South Tahoe Now reported Tuesday that calls and an email seeking comment from Bailey had not been returned as of publication.
As of Tuesday evening, no court date had been publicly identified.
The federal case now moves the Wallace scandal from a lengthy local investigation into the federal court system, putting the alleged loss to a South Lake Tahoe church at the center of a criminal prosecution that began nearly a year ago.
Sources: South Tahoe Now, the City of South Lake Tahoe, Tahoe Daily Tribune, Sacramento Bee and San Francisco Chronicle.
