Updated at 10:40 a.m. with President Trump's response.

NEW YORK -- New York's attorney general says President Donald Trump's foundation served as a personal piggy bank for his businesses, legal bills and presidential campaign.

Trump calls the lawsuit ridiculous.

Trump declared that he "won't settle" the lawsuit that alleges that the Trump Foundation engaged in pattern of illegal self-dealing.

Trump called the suit a "ridiculous case" on Twitter, saying that former state Attorney General Eric Schneiderman "never had the guts to bring" forward before he "resigned his office in disgrace."

Democratic Attorney General Barbara Underwood filed a lawsuit Thursday against the foundation and its directors, Trump and his children Donald Trump Jr., Eric Trump and Ivanka Trump.

The suit seeks $2.8 million in restitution and the dissolution of the foundation. The attorney general, who replaced the recently resigned Schneiderman, asked that the remaining $1 million in assets be distributed to other charities, The Washington Post reported.

Underwood also called for Trump to pay at least $2.8 million in restitution and penalties.

Family members of then-President-elect Donald Trump (from left), including wife Melania, daughter Ivanka and sons Eric and Donald Trump Jr. listen to the second presidential debate at Washington University in St. Louis in 2016. (TASOS KATOPODIS / Getty Images)

"As our investigation reveals, the Trump Foundation was little more than a checkbook for payments from Mr. Trump or his businesses to nonprofits, regardless of their purpose or legality," Underwood said in a statement.

Foundation attorney Sheri Dillon and a Trump Organization spokeswoman didn't immediately respond to messages seeking comment. She still represents the foundation.

Schneiderman began investigating the foundation in 2016 after Post reports that foundation spending personally benefited the presidential candidate. Schneiderman, who resigned in the wake of claims he abused some of girlfriends, ordered the foundation to stop fundraising in New York.

The Trump campaign, at the time, said the foundation intended to cooperate with the investigation. The campaign had previously called Schneiderman "a partisan hack" who backed Trump's 2016 Democratic rival, Hillary Clinton.

Underwood said 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.

The Associated Press and The Washington Post

Information compiled by Breaking News producer Loyd Brumfield