New York Attorney General Andrew M. Cuomo filed a lawsuit against Ernst & Young LLP charging the accounting firm with helping Lehman Brothers Holdings engage in an accounting fraud masking the true state of its balance sheet.

The attorney general seeks the return of the entirety of fees E&Y collected for work performed for Lehman between 2001 and 2008, exceeding $150 million, plus investor damages and equitable relief.

The lawsuit claims that E&Y explicitly approved the so-called “Repo 105” transaction that Lehman engaged in for more than seven years leading up to its bankruptcy filing in September 2008. The purpose of the transaction was to temporarily park highly liquid, fixed-income securities with European banks to reduce the leverage on Lehman’s financial statement.

“This practice was a house-of-cards business model designed to hide billions in liabilities in the years before Lehman collapsed,” Cuomo said in a press release.

“Just as troubling, a global accounting firm, tasked with auditing Lehman’s financial statements, helped hide this crucial information from the investing public. Our lawsuit seeks to recover the fees collected by Ernst & Young while it was supposed to be using accountable, honest measures to protect the public.”

Cuomo will become governor on Jan. 1.

The complaint, filed in New York Supreme Court, alleges that E&Y was fully aware of the Repo 105 transactions, specifically approved of Lehman’s use of them, and gave Lehman an unqualified audit opinion every year from 2001 to 2007, despite knowing that they concealed the Repo 105 transactions.

The lawsuit also alleges that in 2007 and early 2008, when Lehman was facing demands to reduce its leverage, Lehman rapidly accelerated its use of Repo 105 transactions, removing up to $50 billion from its balance sheet on a quarterly basis without disclosing the use of the Repo 105 transactions.

It also alleges that E&Y failed to object when Lehman misled analysts on its quarterly earnings calls regarding its leverage ratios, and that E&Y did not inform Lehman’s Audit Committee about a highly-placed whistleblower’s concerns about Lehman’s use of Repo 105 transactions.