Scandalous past of Lake Tahoe mayor who resigned after stealing $300,000 from church while claiming she had depression

The former mayor of South Lake Tahoe who resigned after admitting to stealing $300,000 from a church was previously accused of defrauding an insurance company.

Tamara Wallace had served as mayor of the California city since December 2024, and for one year in 2022, but resigned on Monday after admitting to the theft.

The scandal-plagued mayor sent a confessional letter to several local news outlets, blaming her struggles with mental health for stealing from the Presbyterian Church over several years. 

But Wallace also previously faced a lawsuit from Federal Insurance Company, now a subsidiary of insurance firm Chubb, for ‘theft of funds’ totaling over $100,000, according to the San Francisco Chronicle.

The records reviewed by the outlet showed that Wallace agreed to repay the money after the alleged fraud was discovered in 2006, but then failed to repay the cash, prompting a second lawsuit from the firm in 2021. 

The lawsuits reportedly did not give details over how Wallace allegedly stole from the insurance company, however the first lawsuit was dismissed months after it was filed. 

The second lawsuit alleged that Wallace fraudulently received a payout of $122,193, but then failed to follow a payment plan that she had agreed to 15 years before when it was found to be erroneous. 

The company said Wallace agreed to pay just $200-a-month until the balance was paid off, but she stopped paying around February 2017, despite an agreement that she would be liable for the full amount if she ceased her payments. 

After Wallace was allegedly caught in 2006, she signed a promissory note acknowledging she owed the money and insisted she would pay it back, the company said. 

At the time she stopped paying, Wallace still owed more than $110,000, the Chronicle reported. 

In June 2022 Wallace was ordered by a judge to repay the company, and she signed a second promissory note agreeing to make $400 monthly payments, on top of a $2500 initial payment. 

The emergence of the alleged insurance fraud adds another layer to the political scandal which forced her to leave office earlier this month. 

Dana Tibbitts, a member of the El Dorado County Government Watch group, told the Chronicle after the scandal emerged, ‘the most important thing is that (the theft from the church) was not her first rodeo. 

‘She has been down this road a long time… and we probably don’t know the half of it.’ 

Keep reading