New York's Attorney-General has sued US President Donald Trump, three of his children and his namesake foundation, alleging "persistently illegal conduct" at the nonprofit including support for Mr Trump's 2016 campaign.
Attorney-General Barbara Underwood asked a New York state judge to dissolve the Donald J Trump Foundation, and impose bans on Mr Trump, his sons Donald Jr and Eric, and his daughter from holding leadership roles in New York charities.
Ms Underwood said her office's 21-month investigation, begun under her predecessor Eric Schneiderman, uncovered "extensive unlawful political coordination" by the foundation with Mr Trump's campaign, as well as "repeated and willful self-dealing" to benefit Mr Trump's personal and business interests.
The Republican President attacked the lawsuit in a series of tweets that blamed Democratic politicians in his home state.
"The sleazy New York Democrats, and their now disgraced (and run out of town) A.G. Eric Schneiderman, are doing everything they can to sue me on a foundation that took in $18,800,000 and gave out to charity more money than it took in, $19,200,000. I won't settle this case!" he tweeted.
The Trump Foundation issued a statement criticising the lawsuit as "politics at its very worst" and accusing the Attorney-General of holding its $US1.7 million in remaining funds "hostage for political gain".
The lawsuit adds to legal problems affecting Mr Trump, including a probe by Special Counsel Robert Mueller into whether Mr Trump's 2016 campaign colluded with Russia.
Mr Trump and Russia have denied there was any collusion.
The lawsuit filed in the state Supreme Court in Manhattan is seeking $US2.8 million of restitution plus penalties, a 10-year ban on Mr Trump serving as a director of a New York nonprofit, and one-year bans for his children.
"As our investigation reveals, the Trump Foundation was little more than a chequebook for payments from Mr Trump or his businesses to nonprofits, regardless of their purpose of legality," Ms Underwood said in a statement.
"That is not how private foundations should function."