NEW YORK (AFP) - Former US President Donald Trump and his family faced the increasing likelihood of criminal charges Wednesday (May 19) after New York state's prosecutor said it was working with Manhattan investigators in its probe into the former president's business dealings.

The office of New York state Attorney General Letitia James announced late Tuesday it was investigating the Trump Organisation in a "criminal capacity."

Previously, it had said its probe into possible tax, insurance and bank fraud was through civil proceedings, which do not carry the threat of an indictment or imprisonment.

Trump denies wrongdoing, and has described the parallel criminal investigation by Manhattan's district attorney as "a continuation of the greatest political witch hunt in the history of our country."

Trump on Wednesday attacked New York state's attorney general for launching the probe, saying he was "being unfairly attacked and abused."

"There is nothing more corrupt than an investigation that is in desperate search of a crime," Trump said in a statement, adding that "we will overcome" any attempt at prosecution.

The prosecutors in both Manhattan and New York state are Democrats.

"We have informed the Trump Organisation that our investigation into the organisation is no longer purely civil in nature," said a spokesman for James.

"We are now actively investigating the Trump Organization in a criminal capacity, along with the Manhattan DA," Fabien Levy, the spokesman, added.

The Trump Organisation is the holding company for hundreds of Trump entities, ranging from hotels to golf courses.

It is not listed on the stock exchange and is therefore not required to report its accounts.

Investigators suspect the organization may have artificially inflated and reduced the value of assets, particularly several properties in New York state, to either get bank loans or reduce their taxes.

Manhattan District Attorney Cyrus Vance's investigation initially focused on hush payments made to two women who allege they had affairs with Trump, but has expanded to allegations of tax evasion, and insurance and bank fraud.

Vance, who leaves his post at the end of December, acquired eight years of Trump's tax returns in February after a years-long legal battle that went to the Supreme Court.

Two state assistant attorneys general will join the Manhattan DA's efforts, according to sources familiar with the matter cited in The New York Times, as James's office continues its civil inquiry.

Bennett Gershman, professor of criminal law at Pace University and a former Manhattan deputy attorney, said James's announcement amounts to a "show of strength" by the two prosecutors.

"They are showing they mean business," he told AFP. "They are moving forward aggressively. They are not backing off.

"Looking at this announcement I'd say we are much closer to charges being brought," Gershman added.

Republican support

Observers suspect the statement was also intended to increase pressure on key witnesses, namely Trump's long-serving chief financial officer Allen Weisselberg, whom prosecutors hope will collaborate with them.

Recently, investigators took possession of financial documents belonging to his son in order to put pressure on the 73-year-old.

In April, the Trump Organisation bolstered its legal team, hiring veteran criminal defence attorney Ronald Fischetti, 84, in a sign it was gearing up to defend its case.

Since leaving the White House in January after his defeat to Joe Biden, the former businessman and reality TV star retains a strong hold on many Republican voters - despite losing his powerful social-media megaphones of Twitter and Facebook.

The only leader in US history to be impeached twice continues to make baseless claims that Biden won because of voter fraud.

Yet his messaging appears to still resonate, with a CBS News poll released last weekend finding that 67 per cent of Republican voters believe Biden is not the legitimately elected president.

No former US president has ever been indicted, but Trump's ex-lawyer Michael Cohen was rubbing his hands with glee at the prospect that his former boss might become the first.

"Welcome to the #TrumpProsecutionParty!" tweeted Cohen, who was sentenced to three years in prison for tax evasion and violating electoral finance laws and is collaborating with investigators against Trump.