SOUTH LAKE TAHOE, Calif. — Oct. 13, 2026
Former South Lake Tahoe Mayor Tamara Wallace pleaded not guilty Tuesday to a federal wire fraud charge involving nearly $390,000 allegedly taken from Lake Tahoe Community Presbyterian Church, bringing a high-profile El Dorado County investigation into federal court.
Wallace appeared before Chief U.S. Magistrate Judge Carolyn K. Delaney at the U.S. District Court in Sacramento. According to South Tahoe Now, Wallace waived her right to an indictment by a grand jury and entered a not guilty plea. Her attorney, Steven C. Bailey, accompanied her to court, as did her husband, Duane Wallace.
The case follows a public admission by Wallace in October 2025 that she took money from the church, where she worked as a bookkeeper. She resigned from the South Lake Tahoe City Council on Oct. 13, 2025, after serving as mayor and representing the community on the council.
Prosecutors allege yearslong financial scheme
The federal charge, filed Sept. 15, alleges Wallace diverted church funds between April 2019 and September 2025 through reimbursement checks made payable to herself and unauthorized electronic transfers.
According to the charging documents, the checks totaled approximately $360,000, while electronic transfers accounted for another $31,000. Prosecutors allege Wallace disguised the payments as reimbursements for expenses she had not incurred and altered entries in the church’s digital financial records to conceal the transactions.
The charging documents cite a Sept. 5, 2025, transaction in which Wallace allegedly wrote herself a $7,500 check from the church’s account and deposited it into an account she controlled. The check’s description in the church’s digital records reportedly read, “Reimb.”
Prosecutors allege the total loss approached $390,000 and that Wallace used some of the money for personal expenses, including rent and travel. These allegations have not been established by a conviction.
Church faced financial strain
The alleged losses had consequences beyond the church’s financial records.
According to the federal charging documents, the scheme nearly forced the congregation to close. The church reduced programming, took out loans to cover expenses and incurred late fees and interest on overdue bills.
The church’s governing board also publicly addressed the matter after it became known in 2025, saying the congregation had suffered significant losses. The board said Wallace was an employee, not a member or attendee of the church.
For South Lake Tahoe residents, the case has drawn particular attention because Wallace was a former elected official in the Lake Tahoe Basin, where public confidence in local leadership and community institutions is a central concern.
The alleged conduct, however, concerns Wallace’s employment at the church. South Lake Tahoe city officials have emphasized that the matter involved her private employment and not city funds.
El Dorado County investigation led to federal prosecution
The case involved multiple law enforcement agencies, including the South Lake Tahoe Police Department, the El Dorado County District Attorney’s Office and the FBI.
El Dorado County District Attorney Vern Pierson previously said he wanted the case pursued federally because he believed the consequences under state law would not adequately reflect the alleged harm.
“We are grateful to the United States Attorney’s Office and the FBI for taking this case, and we will continue to work closely with our federal partners so that cases that call for real accountability can be brought where real accountability is available,” Pierson said, according to South Tahoe Now.
The federal prosecution places the case within the jurisdiction of the U.S. District Court for the Eastern District of California, which handles federal criminal matters arising in the region.
What happens next?
Wallace is free on her own recognizance, according to the report on Tuesday’s court appearance.
A subsequent court proceeding is expected Oct. 29, when a change-of-plea hearing or further status proceedings may take place. Wallace’s not guilty plea means the charge remains contested; the plea itself does not establish guilt or innocence.
Federal wire fraud carries a maximum statutory penalty of 20 years in prison and a $250,000 fine, or both, along with a potential term of supervised release. The maximum penalty is not a prediction of the sentence in this case. Any sentence would depend on the case’s eventual outcome and applicable federal sentencing rules.
For El Dorado County residents, the next court date will be an important milestone in a case that has unfolded over more than a year, from Wallace’s public admission and resignation to a federal criminal charge.
The case remains pending, and Wallace is presumed innocent unless proven guilty in court.
