How did a South Lake Tahoe pastor discover ex-mayor’s theft? ‘Complete betrayal’

The Lake Tahoe Community Presbyterian Church pastor said he learned more than $360,000 missing from the church’s account when its treasurer tried to pay their utility bill last month.

The electric bill was supposed to have been settled by the house of worship’s bookkeeper, Tamara Wallace, who was also South Lake Tahoe’s mayor. The Rev. Dr. Greg Hughes said when Wallace didn’t show up to work, and he didn’t have access to the computer. So he retrieved its password to avoid the utilities being turned off, but the church treasurer found a bigger problem after logging on — depleted church coffers.

Wallace confessed Oct. 5 to stealing an unnamed amount over “an extended period of time” and said “I had not been found out; in effect, I turned myself in,” in bombshell letters published by two local news organizations.

Hughes said, in his first interview since news of the theft ricocheted around the country, that he and the church’s treasurer discovered those missing funds.

“I was shocked and disappointed, hurt, angry,” Hughes said, later adding: “It’s absolutely a complete betrayal.”

Hughes, who declined to offer more details of the missing money, said Wallace’s conduct did not just affect local congregants. The money could have funded a children’s youth pastor or ministries in other countries. The theft began around the time Wallace started working at the church in 2018, he said.

“She affected ministries, literally worldwide, that we support,” Hughes said. He later added he forgave Wallace, but that does not alleviate her action’s consequences.

Wallace, who resigned from her mayorship on Oct. 13, and her attorney did not immediately respond to a request for comment. The El Dorado County District Attorney’s Office said it is investigating the theft.

The South Lake City Council is scheduled to meet Tuesday to discuss selecting a new mayor and to address board vacancies once occupied by Wallace.

In Wallace’s letter she said guilt, shame and grief struck after the theft, adding she attempted suicide and then checked herself into a mental health facility and received therapy. She vowed to pay back every cent and listed traumatic life events that weighed on her mental health, according to her letters published in SouthTahoeNow.com and the Tahoe Daily Tribune.

“My guilt came from my taking funds from a church that, individually and as a group, embraced me, showed me love, and trusted me as their church administrator,” she wrote.

Wallace’s conduct rocked the region, where she served on multiple influential boards as mayor. She led the city’s response to the Caldor Fire in 2021 that crept into the Sierra Nevada and forced 20,000 people to evacuate in South Lake Tahoe and surrounding regions.

Hughes believed Wallace shared his goals to attract a younger congregation and to reinvigorate their battered institution. The church burned in a 2019 fire, set by a teenager, that caused $15,000 worth of damage and the pandemic rocked the house of worship’s stability, according to local news reports.

“I thought she was a friend and ally,” he said.

Wallace, after the church fire, coordinated the restoration efforts, according to an opinion letter penned in 2022 by Nancie Norton and published by SouthTahoeNow.com. A request for comment under a phone number listed for Norton was not returned.

Wallace’s responsibilities as a bookkeeper included coordinating efforts to feed homeless people and helping to host a food pantry, Hughes said.

The church’s board, in a statement shortly after the theft was revealed, wished both compassion and justice for Wallace. Its congregation, filled with influential regional leaders, are praying for her recovery, Hughes said.

“Our congregation has suffered extensive loss, and as we address this loss and its impact, we remain committed to prayer, compassion, transparency, and justice,” the board wrote on Oct. 7.

Compassion, Hughes said, includes informing the community about Wallace’s misdeeds so her current and future employers are informed of her complete history. And obtaining justice in his case partly includes bringing this conduct to light, he said.

“There’s a great sense of shame,” Hughes said. “‘We all feel like, ‘How did we miss this?’”

The church performed a background check on Wallace but did not see previous concerning conduct by Wallace, he said.

Wallace has been sued by the Federal Insurance Company for failing to pay back money she’s accused of stealing, according to SouthTahoeNow.com.

Hughes hoped Wallace would recover and live a productive, long life. A person’s past does not have to define their future, he said.

“We wish her well,” Hughes said. “I hope she does well. I hope this can be a turning point in her life where great things can happen.”

This story was originally published October 21, 2025 at 5:00 AM.