By JENNIFER PELTZ, Associated Press

NEW YORK (AP) — New York's attorney general filed a lawsuit Thursday accusing Donald Trump of illegally using money from his charitable foundation to settle disputes involving his business empire and to burnish his image during his run for the White House.

The president blasted the case as politically motivated.

The lawsuit seeks $2.8 million in restitution and the dissolution of the foundation.

The two-year investigation detailed a closely coordinated effort between Trump's campaign and the foundation to promote his political career by giving out big grants of other's people money to veterans organizations during the run-up to the Iowa caucuses, the first presidential nominating contest of 2016, the suit says.

"The foundation's grants made Mr. Trump and the campaign look charitable and increased the candidate's profile to Republican primary voters and among important constituent groups," Democratic Attorney General Barbara Underwood's lawsuit said.

It accused the foundation of "improper and extensive political activity, repeated and willful self-dealing transactions, and failure to follow basic fiduciary obligations."

In a couple of tweets, Trump called the case "ridiculous."

"I won't settle this case!" he wrote.

The 31-year-old foundation said that it has given more than $19 million to charitable causes while keeping expenses minimal, and that Trump and his companies have contributed more than $8 million.

It already announced its intention to dissolve more than a year ago, the charity added in a statement.

"This is politics at its very worst," the statement said, noting that the former New York attorney general who began the investigation, Democrat Eric Schneiderman, was a vocal Trump opponent.

Schneiderman resigned last month after he was accused of physically abusing women he dated; he denied the allegations. Trump's tweets also pointed to Schneiderman's resignation.

"Schneiderman, who ran the Clinton campaign in New York, never had the guts to bring this ridiculous case, which lingered in their office for almost 2 years. Now he resigned his office in disgrace, and his disciples brought it when we would not settle," Trump said.

Schneiderman started investigating the charity and ordered it to stop fundraising in New York in 2016, after The Washington Post reported that the foundation's spending personally benefited the presidential candidate.

Some of those expenditures, uncovered by The Post, were cited in the lawsuit, including a $100,000 payment to settle legal claims against Trump's Mar-a-Lago resort in Palm Beach, Florida; $158,000 to resolve a suit over a prize for a hole-in-one contest at Trump National Golf Club in Briarcliff Manor, New York; and $10,000 to buy a 6-foot (1.8-meter) portrait of Trump at a charity auction.

After New York's attorney general began investigating, Trump's business empire reimbursed the foundation for the money spent to settle the business disputes. And the painting, which was hanging at a Trump golf club in the Miami area, was returned to the foundation.

Underwood, a career government lawyer who was appointed after Schneiderman's resignation and has said she doesn't intend to run for election, said she has referred her findings to the IRS and the Federal Election Commission for possible further action.

In exchange for their tax-exempt status, charities are required to follow certain rules, among them a strict prohibition against getting involved in political campaigns.

The Trump Foundation's mission says its funds are to be used "exclusively for charitable, religious, scientific, literary or educational purposes," either directly or through other organizations, according to the lawsuit.

In keeping with federal tax rules, the charity's incorporation documents say none of its resources can directly or indirectly go to the benefit its directors or officers and none of its activities can benefit any political candidate or campaign.

Trump's foundation was "co-opted" by his presidential campaign, particularly in the run-up to the Iowa caucuses, the lawsuit says.

Spurning a Republican candidates' debate on Jan. 28, 2016 — four days before the caucuses — Trump instead participated in a televised rally and fundraiser for veterans organizations.

The event raised approximately $5.6 million, about $2.8 million of which went to the Trump Foundation; the rest was given directly by donors to veterans groups, the lawsuit says.

Then the foundation "ceded control" over the money to campaign staff members, the suit says.

"Is there any way we can make some disbursements this week while in Iowa?" then-campaign manager Corey Lewandowski wrote in an email to the chief financial officer of Trump's business, the Trump Organization.

Lewandowski did not immediately respond to a request for comment Wednesday.

The foundation went on to make five grants of $100,000 before the caucuses, with Trump presenting giant checks at a series of campaign rallies, to applause and praise from such figures as Jerry Falwell Jr., the president of Liberty University and son of the late Rev. Jerry Falwell, who was a force in GOP politics.

"How often do you see a presidential candidate giving money away instead of taking it?" the younger Falwell told the crowd at a Trump rally.

The oversized checks bore Trump's "Make America Great Again" campaign slogan along with the foundation's address.

Trump didn't give any money personally at the time, but several months later, after media pressure, followed through on a pledge to donate $1 million.

Underwood's suit was filed the same day the Justice Department's inspector general was due to release a report on former FBI Director James Comey's handling of the Hillary Clinton email investigation.

Associated Press writers Jake Pearson in New York and Jill Colvin in Washington contributed.