DECISION AND ORDER The United States of America (“Plaintiff”) filed this action against Moshe Lax (“Lax” or “Defendant Lax”) and others to collect unpaid federal income and estate tax liabilities owed by the Estate of Chaim Lax and to obtain money judgments related to alleged schemes undertaken to shield businesses and property held by Lax and others from creditors of the Estate, including the IRS. (Am. Compl. at 1-2, Dkt. 106.) Plaintiff has filed a Motion to Declare Waiver of Attorney-Client Privilege and that the Crime-Fraud Exception Applies (the “Motion,” Dkt. 253), seeking a declaration (1) that Lax waived attorney-client privilege related to five documents he disclosed in discovery, and (2) that the crime-fraud exception applies to Lax’s communications with the law firm of Porzio Bromberg & Newman, PC (the “Porzio Firm”) regarding a transaction that Plaintiff contends was fraudulent. (See “Pl. Mem.,” Dkt. 258-1.) For the reasons set forth below, the Court grants the Motion. BACKGROUND I. The Assignment for the Benefit of Creditors (“ABC”) Plaintiff alleges that Lax and other defendants engaged in a series of schemes to evade the collection of the liabilities of the estate of Chaim Lax. (Pl. Mem. at 2; Am. Compl.
58-179.) The schemes involved “a series of fraudulent transfers and other artificial transactions designed to hide the Lax family assets from the IRS and other creditors and make it appear as though the Estate was insolvent.” (Am. Compl. 58.) Among the alleged schemes carried out by Lax was a 2010 assignment for the benefit of creditors transaction, or “ABC,” related to Dynamic Diamond Corp., a business controlled by Lax (the “2010 ABC”). (Pl. Mem. at 2.) An ABC is a New York state court business liquidation proceeding offered to insolvent debtors as an alternative to bankruptcy, during which the business “would transfer its assets to an attorney to hold in trust, for the purpose of selling or disposing of the assets to the satisfaction of its creditors.” (Am. Compl. 102.) Prior to the 2010 ABC, Lax wrote a memorandum dated September 8, 2009, titled “Confidential internal Lax Family Memo,” addressed to “Ma, Sisters, brother and brothers-in-law,” and with the subject line “RE: Restructuring legal structure of Dynamic Diamond Corp. due to the creditors situation.” (the “Lax Memo,” Ex. B to the Motion at 1 (all references to ECF pagination), Dkt. 253-3.) In it, Lax stated, in part, After days, weeks, and months of discussions with attorneys of restructure, corporate and tax laws in addition to hired accountants by the attorneys firm it is becoming crystal clear that the old Dynamic co. might become insolvent in regards to future business. (It is of course solvent in the sense of paying its obligations other then the IRS claim) which might result that all future profits in addition of all assets might be seized by the IRS. It is the understanding of the attorneys that in some way a new corporation needs to be formed rather sooner than later. (See: attached memo from the leading attorney, Warren Martin Jr.) (Id. at 1 (all errors in original).) The memo sets forth three options for forming a new corporation and, although it references an “attached memo,” no document was attached to the submission to the Court. On February 26, 2010, approximately one week before initiating the 2010 ABC, Dynamic Diamond Corp. changed its name to White Coat, Inc. (Am. Compl. 100; Department of State Record for White Coat, Inc., Ex. C to the Motion at 2, Dkt. 253-4.) On March 4, 2010, White Coat, Inc. executed a deed of Assignment for the Benefit of Creditors (the “ABC Deed”), by which it assigned its assets and liabilities to Tracy L. Klestadt, Esq. for the sum of one dollar, to “sell or dispose” of the assets, and “pay and discharge in full” all debts and liabilities. (See ABC Deed, Ex. D to the Motion at 1-2, Dkt. 253-5.) Lax’s brother-in-law1, Martin Ehrenfeld, signed the ABC Deed on behalf of White Coat, Inc. as its “Chief Restructuring Officer.” (Am. Compl. 103; Transcript of Oral Argument held on January 25, 2022 (“Oral Arg. Tr.”) 41:3-9, Dkt. 282.) On the same day, Klestadt requested “entry of an order approving the sale of substantially all of White Coat Inc.’s assets to Diamond Dynamics LLC, a newly-formed corporation,” whose sole member was Shaindy Lax, Defendant Lax’s wife. (Am. Compl.
