New York attorney general Letitia James has rejected a settlement offer by lawyers to Donald Trump in a fraud investigation of the ex-president’s organisation.

The Trump Organisation now stands the risk of being sued following the three-and-a-half years’ investigation launched by Ms James.

Ms James had been investigating Mr Trump and his organisation over allegations that the ex-president was deliberately inflating the values of his assets to fraudulently benefit from tax cuts, bank loans and insurance deals.

Describing the investigation as politically motivated and violating of his constitutional rights, the controversial ex-president had tried to fight off Ms James inquiry in a legal battle that ended unsuccessfully for his organisation. 

Mr Trump’s business may suffer a severe blowback should the matter proceed to trial and his team loses, as the court could impose stiff sanctions such as revoking his corporate charter, a document that permits him to operate his business in New York.

Mr Trump could also be asked to return all the funds allegedly received as proceeds of fraud should he lose at trial.

Meanwhile, Ms James also mulls suing Mr Trump’s children Ivanka, Eric and Donald Trump Jr., who are all senior executives at the Trump organisation.

The erstwhile president, not a stranger to investigation, is currently being investigated for keeping classified government documents in his personal home. F.B.I had raided Mr Trump’s home and found sensitive documents in his possession.