NY attorney general sues Trump Foundation, alleges illegal self-dealing

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A lawsuit filed by New York's attorney general Thursday said President Donald Trump used his charitable foundation to settle personal business disputes and bolster his political image with donations directed by his staff.

NY state began investigating the Trump Foundation in response to a probe by The Washington Post. Schneiderman's successor, Barbara Underwood, brought the case against Trump on Thursday.

Trump began tweeting soon after the charges were filed, dismissing the lawsuit as the work of "the sleazy New York Democrats" and claiming the foundation "took in $18,800,000 and gave out to charity more money than it took in, $19,200,000".

The Trump Foundation issued a statement criticizing the lawsuit as "politics at its very worst" and accusing the attorney general of holding its $1.7 million in remaining funds "hostage for political gain".

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This developing report will be updated.

"The foundation was little more than a checkbook for payments to not-for-profits from Mr. Trump or the Trump Organization", Underwood said in a 41-page complaint filed in NY state court in Manhattan.

Donald Trump Jr., Ivanka Trump and Eric Trump were also named in the lawsuit because they have been official board members of the Donald J. Trump Foundation for years.

Trump has already paid more than $330,000 in reimbursements and penalty taxes, Underwood said in the suit.

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Underwood also sent referral letters to the Internal Revenue Service and the Federal Election Commission for further action. According to the investigation, the Trump Foundation also entered into at least five self-dealing transactions that were unlawful because they benefited Trump or businesses he controls. She also asked that Trump be banned from heading any other nonprofits in NY for the next decade.

The AG has jurisdiction over the Trump Foundation because it is based at Trump Tower in Manhattan and registered in the state.

In one significant incident, Trump raised money for the foundation during a January 2016 televised veterans' fundraiser he held instead of participating in the Iowa primary debate. Mr. Trump defended himself on Twitter, calling the suit "ridiculous".

"The foundation is little more than an empty shell that functions with no oversight from its board of directors", the lawsuit alleges.

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