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The New York attorney general's office detailed what it called "a shocking pattern of illegality" and said the foundation's decision to shutter was "an important victory for the rule of law."
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The lawsuit alleges that funds raised for the president's charitable foundation were improperly used to support the 2016 presidential campaign.
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The directors of the foundation named in the suit are President Trump and three of his children. The suit alleges unlawful political coordination and "self-dealing" that benefits Trump businesses.
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Democratic Attorney General Eric Schneiderman's office is requiring the Trump Foundation to stop fundraising in New York because it does not have the proper certification to do so.