A case filed by New York's attorney general on Thursday accuses President Donald Trump of using his charitable foundation to settle personal business disputes and bolster his political image with donations directed by his staff.
The Donald J Trump Foundation "was little more than a chequebook for payments from Mr Trump or his businesses to nonprofits, regardless of their purpose or legality", Democratic Attorney General Barbara Underwood said as she sued to dissolve the foundation and seek $2.8 million (Dh10.3m) in restitution.
The lawsuit says the foundation illegally helped support the Republican's campaign by raising money at a nationally televised fundraiser in January 2016, then allowing campaign staffers to dictate how the money was spent in grants.
In a couple of tweets, Mr Trump called the case "ridiculous" and said he would not settle the lawsuit.
Mr Trump made a similar claim that he would not settle a lawsuit charging that his Trump University misled customers, but ultimately paid a $25m settlement last year.
Foundation attorney Sheri Dillon and a Trump Organisation spokeswoman did not immediately respond to messages seeking comment.
The foundation's mission says its funds are to be used "exclusively for charitable, religious, scientific, literary or educational purposes", either directly or through other organisations, according to the court filing. In keeping with federal tax rules, the charity's incorporation documents say none of its resources can directly or indirectly go to the benefit of its directors or officers and none of its activities can benefit any political candidate, the filing notes.
Ms Underwood's predecessor, Democrat Eric Schneiderman, began investigating the foundation in 2016 following Washington Post reports that its spending personally benefited the presidential candidate. Mr Schneiderman ordered the foundation to stop fundraising in New York.
The Trump campaign, at the time, said the foundation intended to co-operate with the investigation. The campaign had previously called Mr Schneiderman "a partisan hack" who backed Mr Trump's 2016 Democratic rival, Hillary Clinton.
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Mr Schneiderman resigned last month after allegations that he abused women he had dated; he denied the claims.
The lawsuit was filed on Thursday against the foundation and its directors, Mr Trump and his children Donald Trump Jr, Eric Trump and Ivanka Trump.
Mr Trump quickly took to Twitter after the lawsuit was filed, criticising the "sleazy New York Democrats" and Mr Schneiderman and claiming his charity had paid out more than it received.