When the mayor of South Lake Tahoe suddenly stepped down, few expected the reason to involve six figures stolen from a church offering plate.

Tamara Wallace, the former mayor of the scenic Northern California city, resigned this month following her own confession that she embezzled $300,000 from a local Presbyterian church where she once worked as an administrator, and her admission also resurfaced a 2006 fraud lawsuit that had remained largely out of the public eye, as Daily Mail reports. 

Wallace had been serving her second run as mayor since December 2024, with a previous stint in 2022, but her political career ground to a halt once her secret financial misconduct exploded into public view.

Confession, Resignation, and Mental Health Claims

The scandal reached a breaking point after Wallace submitted a letter to local news outlets, admitting to the theft and referencing her mental health struggles, childhood trauma, and ongoing health conditions as contributing factors to her decisions.

In that letter, Wallace claimed she was never caught. Rather, she said, “I had not been found out; in effect, I turned myself in.” She even went so far as to provide account details to the church while still hospitalized following a suicide attempt on September 11, her birthday.

Her resignation came the following month, days after she left a mental health facility where she spent 18 days undergoing treatment and receiving medication, according to her statement.

Long-Term Theft and Personal Justification

Wallace admitted the theft took place over a period of years and said she did it to support others—mainly her three grandchildren from a deceased son.

“Most of those funds were to help others,” she claimed, painting a picture of desperation and good intentions gone awry. But even heart-wrenching motives don’t erase hard numbers—or crime.

The mayor insisted, “I must repay every cent and accept whatever punishment comes to me,” and while the repentance is noted, remorse doesn't rewrite the rule of law.

Legal Fallout and Public Skepticism

The El Dorado County District Attorney's Office is now investigating the matter, though city officials have been tight-lipped about specifics. “The City is in no fiscal harm from this situation,” said City Hall spokesperson Sheree Juarez, distancing the government from the growing crisis.

But the larger issue may be trust. Dana Tibbitts from El Dorado County Government Watch didn’t mince words: “The most important thing is that it was not her first rodeo... and we probably don’t know the half of it.”

That comment is more than just suspicion—it’s supported by concrete financial history that only came to light because of Wallace’s new admission.

Revealing a Financier’s Checkered Past

It turns out this wasn’t Wallace’s debut performance in the world of alleged financial misconduct. In 2006, the Federal Insurance Company accused her of misappropriating more than $100,000. She agreed to repay it and signed a promissory note—but stopped payments in 2017 while still owing over $110,000.

The lawsuit was dismissed that year, only for a second suit to be filed in 2021 alleging she had fraudulently received $122,193. That resulted in a court order in June 2022 forcing her to resume payments under a stricter plan: $400 per month after a $2,500 down payment.

Notably, neither of the suits detailed exactly how the funds were obtained, but the financial road map couldn’t be clearer—a troubling pattern of overreach and underpayment.

Another Political Leader Caught Between Public Office and Private Crisis

Wallace’s resignation may close the chapter on her time as mayor, but her public confession and private debts leave behind a complicated legacy. Her statement that “sorry is not a strong enough word” acknowledged the magnitude of her mistakes, but it may not satisfy a public weary of polished apologies followed by similar headlines.

Her husband, Duane Wallace, and her four children—including the late son whose children were reportedly the intended beneficiaries—now share in the aftermath of a saga that’s part tragedy, part cautionary tale.

As the DA’s office moves forward with a criminal probe, residents of South Lake Tahoe are left grappling with a question that now feels both political and personal: Who can you trust when even the mayor is forging promissory notes and confessing to years of theft?