New York A-G alleges Trump business fraud

The Trump family is being investigated over alleged widespread fraud in their business dealings. -AP

New York state's attorney-general has accused Donald Trump's family business of repeatedly misrepresenting the value of its assets to obtain financial benefits, citing what it said was significant new evidence of possible fraud.

The accusations by Attorney-General Letitia James mark a substantial escalation of her civil probe into the Republican former US president's business, the Trump Organisation, and the roles of his adult children.

They are part of her effort to force Trump and his children Donald Trump Jr and Ivanka Trump to comply with her subpoenas to testify under oath, which the family has asked a judge to block

Neither Trump nor his children have been accused of criminal wrongdoing. While James cannot file criminal charges because her probe is civil, she can sue the Trumps and the company.

James is examining whether the Trumps violated a New York law targeting "persistent fraud or illegality," allowing her to seek damages or a court-ordered halt to any wrongdoing.

Trump has called the nearly three-year probe by James, a Democrat, a political "witch hunt."

In filings on Tuesday with a New York state court in Manhattan, James described what she called misleading statements about the values of six Trump properties, as well as the "Trump Brand".

The properties are golf clubs in Aberdeen, Scotland, and suburban Westchester County near New York City, the Seven Springs Estate in Westchester, buildings on Wall Street and Park Avenue in Manhattan, and Trump's penthouse in Trump Tower.

James has been investigating whether real estate values were inflated to obtain bank loans and reduced to lower tax bills, and her filing described evidence of misstatements to lenders, insurers and the Internal Revenue Service.

The attorney-general wants a judge to order the Trumps to testify within 21 days.

"We have uncovered significant evidence that suggests Donald J. Trump and the Trump Organisation falsely and fraudulently valued multiple assets and misrepresented those values to financial institutions for economic benefit," James said in a statement.

Alina Habba, a lawyer for Trump, in a statement called James' accusations "merely the latest in a long line of unfounded attacks against my client and an obvious attempt to distract the public from her own inappropriate conduct. Letitia, you are not above the law."

The Trump Organisation in a statement said it will defend against James' "baseless" accusations, accusing her of twisting the facts and misleading the public because she faces "the stark reality that she has no case".

James' probe also partially overlaps a criminal probe by the office of Manhattan District Attorney Alvin Bragg, which James joined in May, into the Trump Organisation's practices.

The attorney-general said the Trump Organisation has "not made anything approaching a complete production of documents for Mr. Trump," including from cabinets holding his files.

Lawyers for the Trump family have argued that James' subpoenas are an improper means to gather evidence in the civil probe that could then be used in the criminal probe.

Alan Futerfas, a lawyer for Donald Trump Jr and Ivanka Trump, in a statement said James' filings did not address her "repeated threats to target the Trump family" and ignore their constitutional rights by conducting overlapping probes.

In July, the Trump Organisation and its longtime Chief Financial Officer Allen Weisselberg pleaded not guilty in the criminal probe to charges they awarded "off-the-books" benefits to company executives in a 15-year tax fraud.

Many of James' accusations centre on Donald Trump's annual "statements of financial condition," which give lenders and other counterparties the values and liabilities associated with various assets.

James said she found evidence that Trump was "personally involved" in approving the statements, and used them "in numerous commercial transactions for his own financial benefit".

Last month, Donald Trump sued James in a federal court in Albany, the state capital, to halt her civil probe, calling it a means to harass and intimidate a political opponent.