In 2017, Tamara Wallace of Frisco spent $1,158 for three fifth-row seats at a Dallas Mavericks game.
In 2018, she racked up charges of $6,522 at Louis Vuitton and $6,162 at Le Beau Visage, a medical spa in Frisco offering cosmetic and aesthetic treatments.
In early 2019, she made a $10,000 purchase at high-end audio and visual retailer Starpower and a $9,620 purchase at SOTA weight-loss services in Frisco.
On Feb. 20, 2019, she put down a $5,000 deposit at Vouv Event Space in Dallas; on March 26, she put down another $5,000 deposit at planning service Weddings by Stardust for her son’s wedding that November.
Later that day, her boss got the following text alert: “Did you attempt $5,000 on a card ending in 8459 at Weddings by Stardust?”
Wallace had been using her company’s credit and debit cards, as well as its bank accounts, to fund her lifestyle. She was its chief operating officer.
From 2015 until she was fired in 2019, Wallace embezzled $1.36 million from Recycle 2 Support, now Donate 2 Impact, according to criminal and civil court documents in Denton and Dallas counties. She used her position to hide expenses in different accounting books and records at the Dallas for-profit organization that collects shoes and textile donations to financially support local charities.
Wallace pleaded guilty in late January. Her conviction came with a hefty financial penalty as part of her plea deal. Judge Steve Burgess ordered her to pay back $500,000 immediately, followed by annual payments of $86,305 due each year on the anniversary of her sentencing until the remainder of the $1.36 million is paid off. She was sent to jail for 30 days and put on 10 years of probation, with terms that include not working for a nonprofit organization.
“We didn’t know what to believe anymore,” said Matt Kloeber, CEO of Donate 2 Impact. “Our ability to work as a company was being strained from the inside.”
From 2018, Wallace’s last full year at the company, to last year, Donate 2 Impact’s profit grew by 225%, according to chief financial officer Fadi Khoury. The 345-employee company is now doing the best it has financially in the past 10 years, Khoury said. He declined to provide revenue figures.
Donate 2 Impact’s leaders openly discussed details of the embezzlement with The Dallas Morning News, saying they consider it to be a cautionary tale for businesses about the importance of putting strong financial checks and balances in place.
“I don’t want anyone else to have to experience this,” said Patricia Uher, controller at Donate 2 Impact. “There is a reason to have separation of duties.”
A case of ‘pure greed’
Brian Wolfe, financial crimes investigator with Denton County’s district attorney’s office, said the embezzlement investigation took two years to subpoena and gather documents from over 80 different entities or bank accounts.
The findings were worse than he expected, he said.
“By the end, it was tens of thousands every month,” Wolfe said. “I’ve been doing financial crimes for 24 years, and this is in the top five biggest cases I’ve done.”
The median loss in a fraud case in the U.S. and Canada was $120,000 in 2020, while the average loss was $1.2 million, according to a study of 895 cases by the Association of Certified Fraud Examiners.
Texas made 239 arrests related to embezzlement in 2020, the most recent data available from the Texas Department of Public Safety.
The theft was substantial because Wallace “spared no method of stealing,” pocketing petty cash, running up credit and debit cards, writing herself checks and taking from multiple business bank accounts, said David Moore, founder of Specialized Investigations Inc. in Dallas. Moore was hired by Donate 2 Impact to investigate the theft before handing the case over to the DA’s office.
“This was a case of just pure greed,” Moore said. “There was no need. Home improvements and dietary programs aren’t a need.”
When reached directly by phone, Wallace said she had no comment.
Her attorney, Quinton Pelley of the Pelley Law Office in Plano, said in an email that Wallace has been working almost 80 hours a week at three jobs since her arrest in early 2021 in order to pay restitution as quickly as possible. He declined to say where she has been working.
The district attorney’s office and Donate 2 Impact both said they were told the $500,000 paid upfront was from an inheritance Wallace received from her father. Pelley declined to confirm this but said, “If she comes into an inheritance, the remainder of the restitution will be paid immediately.”
“Ms. Wallace ran into some major financial problems and was having a hard time making ends meet,” Pelley said in a statement. He declined to provide additional details.
Wallace previously declared bankruptcy in 2009, three years before joining Donate 2 Impact, according to records from U.S. bankruptcy court in the Northern District of Texas. She listed her assets as $399,850 and her liabilities as $452,051 at the time, according to the petition.
How it started … and grew
Wallace, 55, joined Donate 2 Impact in August 2012 from Christian Community Action, a faith-based nonprofit in Lewisville that ministers to the poor. She was the organization’s chief financial officer, earning about $75,000 annually in 2009, bankruptcy records show.
Kloeber said he was impressed with her experience. In a 2017 announcement about Wallace joining the board of nonprofit Keep Texas Beautiful, which helps take care of community environments, she was listed as having more than 20 years of financial experience and 10 years of volunteer experience with Frisco’s parks and recreation board and other organizations.
“She comes across as very honest and religious,” Kloeber said. “She’s a very smooth talker. She can sell sand in the desert.”
In 2012, Donate 2 Impact was still very small and looking for “jack of all trades” types to hire, Kloeber said. Wallace was given wide authority as chief operating officer and, over time, became a chief financial officer of sorts, he said.
“Wallace was put in a position of trust and authority and controlled the finances, which is similar to what we see in other cases,” Wolfe said. “It was the perfect storm for fraud.”
Wallace was paid commensurate with her duties — nearly $300,000 in 2018, her last full year at the company, according to pay stubs provided to The News. She received a salary of $172,115, a bonus of $109,795, and paid time off and retroactive pay of $14,614.
According to Kloeber and Uher, Wallace had differing conversations with them about her salary and bonus. In 2018, she ended up with a bonus worth 65% of her salary, while most other employee bonuses typically ranged from 10% to 15%, Khoury said.
“If your compensation is high, why would you risk this?” Kloeber asked. “But I don’t think it mattered what she was paid; she was always going to steal.”
The theft started small, Kloeber said. When Wallace was asked to pick up Coca-Cola at Walmart, she would buy extra items for herself, racking up hundreds of dollars, he said.
When Uher asked Wallace to provide her with credit card statements, Wallace told Uher she would handle petty cash and credit cards to help ease the workload, Uher said.
Wallace came across as “very sweet,” Uher said.
Gradually, Wallace’s boldness increased, co-workers said.
In total, Wallace stole about $350,000 by writing checks to reimburse herself for personal purchases, according to court documents.
Credit card statements contained in court documents show that Wallace was using company credit and debit cards to pay for luxury doggy day care at Every Dog’s Day in Frisco; on food, including Panera Bread, Sprinkles Cupcakes, Tiff’s Treats and DoorDash; on flowers from Venus Et Fleur; on DoubleTree Suites in Austin; on home security from SimpliSafe; and on the Hilton Garden Inn in Denton.
Wallace was also using company credit cards to buy items from Donate 2 Impact’s Thrift Giant stores, according to court documents. It operates nine locations in Dallas-Fort Worth.
In 2018, the theft escalated with Wallace “stealing like crazy,” said the company’s vice president, Leila Simpson, who did the majority of the forensic work in collecting Wallace’s records.
That year alone, Wallace used company funds to spend over $15,000 on pet day care, over $30,000 on Amazon, over $6,000 at Apple and over $17,000 on personal travel, according to court documents.
The same year, Wallace bought a second home in Frisco that had been listed for $580,000, according to court documents and Denton County property records. The house sold in April 2021 with a listing price of $625,000.
Citicard statements show Wallace used company funds to pay for over $16,000 worth of home remodeling work in August, September and November 2018.
The heightened theft came at a difficult time for the company, Kloeber said. In December 2017, Donate 2 Impact took on debt to acquire the retail side of the charity Christian Community Action, spending additional money to turn its three thrift stores into Thrift Giant locations, Kloeber said. The added debt prompted Kloeber to pull back on his personal spending, take out a home equity loan and push off swimming lessons for his children.
“She was coming within $1 of her limit on [company] cards,” Kloeber said. “During our tightest time, she never slowed down.”
3 tips for business owners to detect and prevent fraud
Civil suit targets sons, too
In addition to Wallace’s criminal conviction, Donate 2 Impact also is pursuing a civil lawsuit in Dallas County against her and her two sons, Andrew and Steven, who were hired by Wallace to work for the company, according to court documents. The company is alleging the sons assisted in the embezzlement.
With a civil judgment, if Wallace doesn’t have the money or can’t work, the company could go through a collection process and seize her assets, such as stocks and bonds, said Donate 2 Impact attorney Stephen Khoury. The judge could also order Andrew and Steven to pay a sum to Donate 2 Impact, he said. The original petition he filed on behalf of Donate 2 Impact shows they are seeking monetary relief of over $1 million.
Andrew, 27, and Steven, 24, started as interns in 2014 when they were 19 and 16, respectively, Simpson said. Wallace promoted Andrew to store manager in 2017 and to general manager in 2018. In the early years, both sons worked in the stores and assisted logistics in the warehouse, she said.
The lawsuit said Wallace tasked Steven with reconciling bank and credit card statements and that he “assisted Wallace in hiding the theft.” Steven has denied the allegations in a court filing.
The lawsuit also alleges that Andrew joined his mother in using company funds to pay for personal expenses and services, such as day care for their pets.
Andrew also received large bonuses from Wallace, who was in charge of bonuses for everyone, Simpson said. She was supposed to follow a formula created by Kloeber but didn’t, Simpson said. In 2018, Andrew received a salary of $59,250 and a bonus of $90,905, “which were dictated and authorized by Wallace,” according to court documents.
Andrew, Steven and Wallace deny the allegations, court records show. Her sons have not been charged with any crimes.
A statement sent by attorney Sanjay Mathur, who represents the brothers in the civil suit, said the allegations against Andrew and Steven are false.
“We expect the court will dismiss the baseless allegations by summary judgment,” he wrote. “The suit … should never have included her two innocent children in the first place.”
The brothers “are innocent parties who were merely receiving indirect benefits of Tamara Wallace’s actions,” according to their motion for partial summary judgment, which is pending.
When contacted by phone, Andrew Wallace said he had no comment. Steven Wallace hung up and later replied to an earlier email from The News to say he had no comment.
After Kloeber received the text on March 26, 2019, alerting him to possible fraud on Wallace’s company card, he asked her about it and she said it must have been a fraudulent charge, Kloeber said.
Kloeber and Simpson then began looking more closely into Wallace’s spending, he said. Simpson found that after Wallace was questioned, she canceled a Disney Cruise vacation she had made two payments toward with company money. A cancellation email sent to Andrew’s inbox shows it was a five-night Alaskan cruise from Vancouver.
They were alarmed, Simpson said.
After gathering records, company leaders turned to Moore for help in determining the depth of the fraud, Moore said. He set up an interview with Wallace on April 5.
“She was a very strong-willed, very educated, very bright woman who sensed very quickly that this wasn’t the meeting she expected to have this morning, and we weren’t people who were going to make her day good,” Moore said.
Kloeber said he was in the room and remembered Wallace saying she was a generous person and always intended to pay the company back. He also recalled her saying that she loved the company and was worried about what would happen to it without her.
Wallace was fired the day she was confronted, Kloeber said.
“It was incredibly shocking,” Uher said. “I didn’t know whether to cry or be mad.”
Two years later, in March 2021, after evidence was collected by the DA’s office, Wallace was arrested for felony theft.
After Wallace was fired, she was allowed to get her purse and was escorted from the premises, Moore said. He then walked into her office to start gathering evidence and said he noticed signs of a religious person.
“What struck me was behind her desk on the wall above it were the Ten Commandments,” Moore said. “‘Thou shalt not steal’ was fully disregarded.’”
Khoury, who was hired as the new chief financial officer a few months after Wallace was fired, said he worked closely with Kloeber to clean up the books, close loopholes and create new systems. When he joined the company, there was a natural sense of mistrust among employees, he said.
“Just this week there was an employee in my office crying because of what happened and that was three years ago,” Khoury said.
Moore said the incident “had a devastating effect not just financially, but emotionally.”
Donate 2 Impact has made big changes since firing Wallace, Kloeber said. All raises and bonuses now must be signed off by Kloeber and no one can check their own credit card statements, he said. The company also has two chief operating officers, one over logistics and one over retail. And Khoury created a system to tell exactly how much money is in each bank account every day.
Moore said his best advice to businesses is to establish internal controls and separation of authority. Wolfe recommended hiring an outside accountant or auditor to review the books.
“Sometimes smaller businesses and nonprofits don’t have the budget for that, but it’s something that a lot of times is worth it for peace of mind,” Wolfe said. “Theft happens everywhere, from Fortune 500 companies to a convenience store or restaurant owner. It’s just to what degree.”