(FORTUNE Small Business) – Six weeks after meeting the man of her dreams, Elizabeth Lochtefeld abruptly ended the affair. Why? No one knows for certain, but there were plenty of possible reasons. Thomas Toolan III, her lover, had once been arrested for stealing an $80,000 bust from a Manhattan antiques show. One of Lochtefeld's friends had warned her that Toolan hadn't kicked his drinking habit, although he had promised her he had.

When Lochtefeld told her boyfriend that it was over last October, Toolan refused to let her leave his New York City apartment, police say. After Toolan fell asleep, she slipped out at four on a Saturday morning. She fled to the small, cedar-shingled cottage she had been renting on Nantucket, an idyllic island off the coast of Massachusetts, certain she had escaped the lover she had now come to fear. She was wrong.

Two days later, on Oct. 25, 2004, Toolan hopped a plane from New York to Nantucket, rented a car, and purchased a four-inch fishing knife with an orange handle at a local supply store, investigators say. (The knife was never found.) Lochtefeld, 44, was discovered by police at one that rainy afternoon on her living-room floor, brutally stabbed to death. Hours later, after taking a flight to the mainland, Toolan, 37, was arrested in Hopkinton, R.I., for drunk driving in a rented 2005 Chevy Impala. The arresting officers found empty beer and vodka bottles on the floor of his car. The police had been tipped off by one of Lochtefeld's neighbors, who had seen someone fitting Toolan's description at the victim's house around the time of the murder. Once arrested, Toolan was charged with Lochtefeld's murder. He has pleaded not guilty, and his attorney, Kevin Reddington, refused to talk to FSB pending a trial, which is expected within a year.

Lochtefeld seems like the last person to be fooled by a boyfriend or become the victim of a murder. After all, she was a hardheaded entrepreneur who knew her way around New York City's rough-and-tumble construction industry. She helped architects navigate the city's arcane building regulations at Code NYC, the consulting business she founded in 1990. And like most successful entrepreneurs, she took chances and trusted people. "As a small-business owner, you have to have faith in people in order to grow," says her cousin Eric Lochtefeld, 33, a fellow entrepreneur who co-founded the punk-rock music festival the Warped Tour. "We're passionate, inspirational risk takers." Ironically it was those very qualities that may have cost Lochtefeld her life.

Born in Erie, Pa., to John Lochtefeld, an art professor and artist, and his wife, Judy, and raised in Peekskill, N.Y., Lochtefeld displayed an early knack for consensus building. In 1977, as senior class president at her high school in Peekskill, she witnessed a debilitating teachers' strike. Speaking to the school board on behalf of the students, she successfully pleaded with administrators and faculty to resolve their differences. She later graduated from Notre Dame, moving to Manhattan in the mid-1980s.

In 1990 she started Code NYC, her own architectural expediting firm, after working for another firm that she found unethical. In most U.S. cities, builders and architects simply fill out a short form to initiate a project, but in New York the process involves waiting in line at the buildings department and collecting data and code information that is often hard to find. Expediting firms such as Code NYC charge anywhere from $3,500 to $10,000 a project to handle the bureaucratic red tape.

Her timing was good: By the mid-1990s, Manhattan was experiencing a commercial building boom. New York City architect Gilles Depardon recalls working with Lochtefeld on the construction of the swanky Sex and the City-style SoHo eatery Bar 89 in 1995. "She was very good at not just interpreting code, but finding legal ways around it," says Depardon. "She also had an amazing ability to reach out to people."

Like many entrepreneurs, Beth Lochtefeld balanced her social life with a demanding work schedule. Unlike most, however, the striking 6-foot-tall blond, who seemed to command any room she entered, did so with relative ease. Even while tackling the arduous task of building an ethical, woman-run firm in a male-dominated and sometimes shady field, she made plenty of time for fun, collecting friends the way some people collect parking tickets. During the first years of Code NYC, clients and associates were as likely to be invited to her cramped apartment for a fondue dinner as they were to receive reassuring calls that their job was under control. "It evolved out of her personality," says her close friend Mark Devlin, an architect who met her as a client. "It seemed like there were no barriers in her life."

When she first started her business, she told colleagues she wanted to quit by the time she was 35 and do something else. She missed that deadline by a few years but ultimately kept to her plan. By 2001, Lochtefeld decided to put Code NYC on the market. She hoped to get a price equal to one year in sales, at the time about $1 million. Then came 9/11. Lochtefeld was traveling in Asia when terrorists attacked the World Trade Center. By the time she returned, her business was limping, and she found it difficult to command her original asking price. In the end, Lochtefeld and her partner sold the business to two employees for at least a third less.

Still, she was pleased. Relieved of her business, Lochtefeld decamped to Nantucket, where her parents had retired. She quickly got involved in two new projects: the University of Dreams, a California-based career camp for college students and mid-career professionals founded by her cousin Eric, and an artists' collective near her Nantucket home. Indeed, she had acquired nearly everything she wanted--except a life partner. "She always wanted to find someone to start a family," says Vicki Taveras, who worked as Lochtefeld's office manager from the early 1990s and remained a friend after she sold Code NYC.

It was over Labor Day weekend 2004 that Lochtefeld was introduced to "the man you are going to marry," as Toolan was described to her by a neighbor, Bernadette Feeney, who first brought the two together in her Nantucket kitchen. Feeney was a family friend who had known Toolan since he was a child in Brooklyn, where his parents founded a prominent Montessori school today known as the Berkeley Carroll School. The tall and handsome Toolan had worked as a banker at Smith Barney and Citigroup. Not long after they met, Toolan told Lochtefeld he had been fired from the latter firm in 2001 after being arrested and convicted of walking out of a Park Avenue antiques show with a 60-pound, $80,000 marble bust. For the past three years he had been pursuing a variety of entrepreneurial ventures. She told her brother Tom, a 37-year-old banker, that she admired her new boyfriend's honesty. "In retrospect," says Tom, "it was a con artist's trick in case she discovered the arrest on her own." But Lochtefeld was most impressed by Toolan's knowledge of art and literature. To her, he seemed like the perfect mate.

By all accounts, it was a whirlwind romance. They even talked of marriage and children. But there were also warning signs. At least one friend who spent time with the couple early in their courtship had an instant bad feeling. The friend recalls discussing with Lochtefeld how Toolan, said to be a recovering alcoholic, had been drinking beer one afternoon on a Nantucket beach. The next morning Toolan kept calling Lochtefeld on her cellphone while she was driving the friend to the airport. She said she was busy, but he wouldn't get off the phone. The friend later e-mailed photos of Toolan to friends in New York who had attended Columbia around the same time to see if anyone knew him. No one did. (It turned out he did graduate from Columbia with a bachelor's degree in English literature in May 1991.) "I e-mailed her later and said, 'Run, don't walk [away from Toolan],'" says the friend.

But Lochtefeld was smitten. And she had gained so much in her life by trusting others and spotting untapped potential.

While those who knew her best recall her passion about her new partner, most had no idea that she had made more than a romantic commitment. Toolan had been working on some startup deals of his own, including one on which he asked for Lochtefeld's help. The plan was to outsource to India the production of the three-dimensional computer-assisted design (CAD) drawings that most architects rely on to bring their ideas to life. Lochtefeld believed in the idea enough to arrange a meeting for Toolan with representatives of a top New York City architectural firm--and to join him there to sell the merits of his project. Perhaps she sensed a business opportunity for herself.

Why would Lochtefeld help Toolan after learning about his spotty work history and previous arrest? Again, her trustfulness may have blinded her to what her brother Tom now sees as Toolan's ulterior motive in dating her: "He was using her Rolodex." One thing is clear. When Lochtefeld left him, Toolan's plan to use her aid to jump-start his stagnant career evaporated.

Just over a week before her murder, Lochtefeld had lunch with Taveras, who recalls that her former boss seemed excited and happy. "She didn't show any fear," Taveras says. "She showed me a silver flowered pin he had given her." Lochtefeld's biggest worry at the time was deciding which side of her sweater to wear it on.