SOUTH LAKE TAHOE, Calif. – Since the letter authored by former South Lake Tahoe Mayor Tamara Wallace was made public on October 5, 2025, the community has been asking questions about when she will be arrested and charged.

In that “Letter to the Editor” given to South Tahoe Now, Wallace admitted to embezzling funds from Lake Tahoe Presbyterian Church, a fact the church’s lawyer later said was over $300,000.

After public outcry, Wallace resigned from the South Lake Tahoe City Council in an email sent to city management and South Tahoe Now on October 13.

On October 15, Wallace hired former judge Steven Bailey to represent her.

The case is now being investigated by the El Dorado County District Attorney’s Office. At the end of the week of September 22, church officials contacted the South Lake Tahoe Police Department to inform them of a possible embezzlement. The department turned the case over to the DA’s office due to a conflict of interest. 

On October 22, South Tahoe Now asked for an update on the case. District Attorney Vern Pierson’s spokesperson, Melanie Torres, said, “There are no new updates to release.  This remains an active investigation.”

The following day, Bailey responded to our request for an update.

“This is a complicated case and requires significant investigation before the District Attorney can file the case,” said Bailey. “We have reached out to the District Attorney, but have not heard back from them. I would expect that it will be several weeks before they are ready to make a decision on filing.”

After Wallace’s admission, a look into her history in El Dorado County Superior Court documents showed a 2006 “theft of funds” brought against her by the Federal Insurance Company in April of that year. The company was represented by Testan Law out of Southern California. In June of that year, the parties agreed on Wallace paying back $122,193.16. Tamara and her husband, Duane, signed a Promissory Note to pay the amount back at $200 per month, and if their financial situation changed, the insurance company could request an increase in monthly payments.

According to a 2022 court judgment, the monthly payments ended after $11,358.60 was paid, and the balance was $110,834.56. The court ruled in favor of the insurance company, but there was never a trial or other court appearances after 2022 as Wallace signed a new Promissory Note requiring $2500 down payment and $500 per month. We are waiting for Chubb Insurance, the holder of the note, to return our email to check the status of that note.

What the original “theft of funds” was is not yet clear, as the 2006 court paperwork has been purged due to the Promissory Note being signed. Many people who are close to the situation have told South Tahoe Now that it represented money missing from Tamara’s former South Lake Tahoe employer. The Promissory Note states the theft was discovered on April 24, 2006.

This continues to be a developing story.