NEW YORK ( TheStreet) -- ACA Financial Guaranty is suing Goldman Sachs ( GS) for fraud and is seeking $30 million to $90 million in damages. The monoline bond insurer, which is operating in run off, says that Goldman misled the company over a synthetic collateralized debt obligation (CDO) called ABACUS. Goldman Sachs developed and sold the CDO in 2007 on behalf of hedge fund Paulson & Co., according to the press release. ACA claims that Goldman designed ABACUS to fail, so Paulson could short the portfolio and make a $1 billion profit in addition to collecting large fees for investment banking. "Goldman Sachs fraudulently induced ACA to take a long position in and provide guaranty insurance for ABACUS. Goldman Sachs did so by deceiving ACA into believing that Paulson also was to be a long investor in ABACUS," the release says. In July Goldman Sachs settled civil charges related to ABACUS with the Securities and Exchange Commission by paying a $550 million fine. A Goldman Sachs spokesperson did not immediately return calls for comment. --Written by Maria Woehr in New York. To contact the writer of this article, click here: Maria Woehr. To follow the writer on Twitter, go to http://twitter.com/newsgirlmw. To submit a news tip, send an email to: firstname.lastname@example.org.