“One billion, here we come,” the wealthy Toronto doctor wrote in an email to his business partner in 2013.

At the time, Stanley Bernstein still seemed convinced that he and Norma Walton were building a real estate empire together.

Walton — a family lawyer turned property developer — appeared to have a money-making talent for buying, renovating and selling “fixer-upper” properties through Rose & Thistle Group Ltd., the company she co-founded with her husband. Bernstein — Toronto’s most famous “diet doctor” — had the funds to back her.

He had put more than $100 million into dozens of properties he jointly owned with the Waltons, ranging from a Scarborough townhouse complex to multi-storey office buildings.

At first, the arrangement seemed positive. And though they agreed he would have to sign off on any major moves, Bernstein appeared to trust his partner to manage their portfolio.

That was before the accountant for Bernstein’s network of diet clinics began asking probing questions about Walton’s failure to deliver financial reports. It was also before the physician learned she had used some of his money to buy, live in and renovate a $10-million mansion down the road from him in the Bridle Path, perhaps Canada’s most exclusive neighbourhood.

This spring, a jury found Walton, 49, guilty of two counts of theft for diverting $2.2 million of Bernstein’s money to her company and personal bank accounts after taking out $6 million in mortgages on two Don Mills Rd. office buildings without his consent. She used some of the money to pay off personal credit card debt.

Throughout her trial, Walton maintained she had a “colour of right” to borrow and use the money as she saw fit — and that she had no intent to defraud or steal from Bernstein.

The mother of four appeared in court Friday for the start of her sentencing hearing. The prosecution is seeking a six-year prison term. Her lawyer, Howard Cohen, has not yet stated his position.

In June, Walton was acquitted of fraud relating to a separate series of allegations. Her husband, Ronauld Walton, also a lawyer, was found not guilty of theft at the same trial.

The details of how Bernstein and the Waltons’ partnership ended — outlined in complex evidence and testimony — reveal how some of Toronto’s one-per-centers build their net worth — or at least try to — by investing in the city’s climbing real estate market. The trial also displayed the ugliness that can follow when things don’t go as planned.

Whatever the future holds for Walton, her eventual sentence is just one end to a tangle of court proceedings over several years. Both Waltons already face a jaw-dropping $66.9 million in damages to Bernstein from a civil court judgment involving similar facts as the criminal case.

The following account is based on evidence and testimony heard during the Waltons’ trial.

At court Friday, Norma Walton smiled politely and said she could not comment because the matter is before the court.

Norma Walton and her husband met at law school, she testified in May, recounting her humble beginnings for the jurors.

They were called to the bar in 1995, she said, and hung their shingle — Walton Advocates — at Yonge and Lawrence, where he specialized in labour cases and she practised family law. She also self-published a book, titled The Seven Steps to a Successful Separation.

In those early days, they lived with Ronauld’s parents at their Don Mills home, she testified, smiling frequently for the jurors. In court, she wore little makeup and dressed conservatively in below-the-knee skirts, blouses and flat shoes.

The couple lived frugally and were good savers.

With $100,000 in the bank, they bought a building on Mount Pleasant Rd. — their first — and relocated their law practice there.

Things were going well, she testified, and they bought two more properties on Hazelton Ave. in Yorkville, taking out a $2.2-million mortgage. One of the Hazelton buildings was distressed. “It rained indoors,” she told the jury. “Our realtor thought we were completely crazy and told us to stick to law.”

But the couple saw potential. They moved their practice into one building and rented the other, severing the lot and refinancing their mortgage debt. The Hazelton buildings had “great bones” and a phenomenal location, she said.

Another perk of the development business was the chance to rub shoulders with famous tenants — including some of Canada’s legal and corporate elite, a Toronto Blue Jay, an “NFL player who didn’t want to live in Buffalo,” and a “high-tech fellow who had gone to Europe and made a fortune … and had come back with his stripper girlfriend,” she testified.

(“You like to name-drop,” prosecutor Craig Power remarked to Walton during cross-examination.)

With early success, the Waltons began buying, redeveloping and selling other buildings downtown.

“We were very fortunate because, at that time in Toronto, real estate was going up,” she said.

By 2000, real estate was proving more alluring than writing separation agreements.

“We were both middle-class; we didn’t have expensive taste,” she said, “but to make a million dollars in a year was crazy.” They named their principal real estate arm The Rose and Thistle Group.

It was clear the couple should focus on real estate, she said, but to do that, they needed money — at the time, no institutional lender “would touch what we were buying.”

Enter Bernstein.

Seventy-seven-year-old Bernstein also described his career for the jury.

Serious and soft-spoken, the silver-haired physician explained how he graduated from medical school in 1966 and developed an interest in weight loss. He then turned that passion into a network of Bernstein Diet & Health Clinics. At its height, the business had 60 locations across Canada — down to about 50 today — attracting patients with the promise they’ll lose 10 pounds or more every month if they follow the program correctly.

It was not Bernstein’s first involvement in legal proceedings — though he did not describe his earlier experiences to the Waltons’ jury.

In 1992, he was charged with hiring a hit man to kill a business partner. He was also accused of having a $2-million cache of stolen jewelry, including diamonds and Rolex watches. Those charges were all dropped. (At the time, his then lawyer Edward Greenspan said police had “no business arresting him at all.”)

In 1998, Bernstein and his wife, Judy, were stuffed into the trunk of their black Mercedes while thieves plundered the safe inside their Bridle Path home of $200,000 in cash and jewelry.

Bernstein and the Waltons did not travel in the same social circles — their four kids were young, his sons were adults — but he held one of the mortgages on their commercial properties through an investment company and they came to him for more.

He testified he agreed to several more mortgages after she showed him a net-worth statement saying the couple had assets of $15 million.

According to Walton, Bernstein gave them mortgages at 7.8 per cent interest plus a 2 per cent fee and second mortgages for 10 to 11 per cent and a 2 per cent fee.

The loans gave the Waltons the money to place firm offers on several properties, and their portfolio grew. After three years of lending between 2008 and 2010, Bernstein testified, he had made “a nice profit.” He agreed to become not just a lender, but their money partner.

Bernstein was the equivalent of the “gold egg,” said Cohen, Norma Walton’s lawyer, during the trial.

The Waltons and Bernstein signed a contract that laid out the terms of their co-ownership in a growing network of commercial properties. It included that each project would require a separate bank account and that both parties would provide a 50 per cent equity investment.

Bernstein also had a proviso: his involvement needed to be kept quiet.

“I wanted my reputation to be as a physician, not as a property investor,” he explained in court. (In cross-examination, Cohen posed that Bernstein’s real motivation was to make lots of money but behind the back, and out of reach, of his wife, Judy, an allegation the doctor flatly denied. “That’s not true at all,” he responded.)

The Waltons needed Bernstein’s approval for any decisions concerning the selling or refinancing of any property and on any cheque or transfer over $50,000. Otherwise, he played no active role in the partnership.

The Waltons were responsible for the finances, bookkeeping, accounting and filing of tax returns.

Initially, Bernstein was happy with the arrangement that seemed to be producing “strong returns.” By 2013, he had invested about $110 million in 31 projects he co-owned with Rose & Thistle.

But by the early spring of that year, Jim Reitan, the director of accounting and finance at Bernstein’s diet chain, had some concerns. The Waltons had not submitted the monthly financial reports, as required in the agreement.

“The reality is that I have asked for a number of items over an extended period of time and have received virtually nothing of substance,” Reitan wrote to Norma Walton in March 2013. “It can’t be considered a burden to report accurate and timely results to your partner,” he wrote. More such emails followed.

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She grew increasingly defensive.

“We spend every hour of every weekday of every week of every month of every year ensuring that the portfolio is performing at or above pro forma,” she wrote back. “Dr. Bernstein has been well served to date by this partnership as have we.”

But she agreed there were reporting and accounting “deficiencies.” The company’s software wasn’t up to snuff, she said.

Reitan’s poking around revealed red flags. Notably, the Waltons had not been pitching in their equity portion of the partnership, and they’d taken out two mortgages totalling $6 million on the Don Mills Rd. buildings — without Bernstein’s consent.

After more digging in 2013, Reitan discovered Walton had used the money from two mortgages to pay the couple’s tax and Visa bills. As for their share, the Waltons argued their equity was provided by fees and services for each property.

The mortgages on the Don Mills office buildings would be central to the facts behind Norma Walton’s theft conviction. But it was Reitan’s next discovery that proved a bombshell, though it did not relate to the charges on which the Waltons were tried.

The Waltons, he found, had used Bernstein’s money to buy a 20,000-square-foot house in the Bridle Path. They bought 44 Park Lane Circle for $10.5 million on June 26, 2012, using $2.3 million Bernstein had invested in a different project and taking out two mortgages worth $8 million.

The stately home on a 6.2-acre parcel of land — a few doors down from rapper Drake’s estate on one of Canada’s most exclusive streets — was once owned by the Bata shoe family.

Bernstein himself lived about a kilometre away on Post Rd. — another street in the Bridle Path, only slightly less impressive.

Another $260,000 of his money had gone to renovating the Park Lane home, he learned.

With these revelations, Bernstein commenced litigation that touched off years of battles in civil court. Judges in separate civil rulings found the Waltons were responsible for a multimillion-dollar commercial real estate fraud, which they described as “theft,” “the appearance of theft,” “knowing misappropriation” or fraud.

In 2016, Justice Frank Newbould awarded Bernstein $66.9 million in damages, finding the evidence clearly established the Waltons had committed civil fraud and had made fraudulent misrepresentations.

In April 2016, after Bernstein filed a formal complaint, Toronto police, led by Det. Ruth Moran, charged the couple with theft and fraud.

At their trial earlier this year, Norma Walton painted herself as someone who had stuck her neck out in the partnership.

“It was important to (Bernstein) that I be the face of the portfolio, play the role of the developer, guarantee all the financing, run the project,” she said. “He was the silent money.”

At times, she grew testy. She did not steal from or defraud Bernstein because she couldn’t have stolen from her own company, she testified.

Justice Michael Code corrected her: The alleged theft was from companies jointly owned with Bernstein.

As for the Park Lane mansion, that was the real reason the relationship with Bernstein fell apart, she said.

“He wanted that house for his son Warren, and he was very, very angry that I had purchased a property in the same neighbourhood as him with more acreage,” she testified. “He was incredibly angry at that.”

“He wanted the Park Lane property for his son?” Code asked, seeming surprised at Walton’s claim.

“Yes, and that was the reason that our partnership broke down. It had nothing to do with Don Mills,” she said, referring to the mortgages totalling $6 million.

Besides, she insisted, the mansion was another “fixer-upper” investment. The Waltons had no intention of living there for long, she said.

“It’s a neighbourhood for celebrities,” she said. “There’s no sidewalks, there’s no children … the Bridle Path is definitely not a neighbourhood you want to raise children in.”

Bernstein was never asked in court about Walton’s claims that the relationship ended over the house.

“If it had been put to Dr. Bernstein, he would have denied it given its lack of any basis in fact,” Peter Griffin, Bernstein’s lawyer in the civil litigation, wrote in an email to the Star. “It is also entirely inconsistent with the events as they unfolded before the civil proceeding was commenced.”

Although 44 Park Lane Circle came up frequently at the Waltons’ trial, the property was not directly related to their charges. Many specifics about it — including how the Waltons used Bernstein’s money to make the purchase — were off-limits, deemed too prejudicial for juror ears.

Likewise, no mention was made of the fact Norma Walton had previously faced two disciplinary hearings before the Law Society related to her financial dealings with clients and was disbarred in 2015.

Ronauld Walton did not testify at the trial. His lawyer, Michael Kohl, said the Crown failed to prove he played any role in the alleged theft.

At the end of a month-long trial this spring, the jury returned to court after a day of deliberations and found Norma Walton guilty of two counts of theft over $5,000, but acquitted her of fraud.

Several witnesses at Friday’s sentencing hearing testified to Walton’s extreme intelligence and good character, and her husband described in detail many health challenges that have rendered him unable to work or care for the couple’s children, ages 6 to 13.

If she goes to jail, “I can’t look after them,” Ronauld Walton testified.

“I love my children but I just couldn’t do it,” he said, adding that the family is living in a rented house.

The sentencing hearing resumes Sept. 3, when the judge is expected to hear from a psychiatrist, retained by the defence, who will testify about Norma Walton’s state of mind.

On Feb. 18, 2015, 44 Park Lane Circle was sold under power of sale for $9,650,000. Despite the nearly $300,000 in renovations done during the brief time the Waltons lived there, the mansion was demolished by the new owners.