NEW YORK (REUTERS) - A New York judge ruled on Thursday (Feb 17) that former US president Donald Trump and two of his adult children must answer questions under oath within 21 days in the state attorney-general's civil probe into their family company.

Justice Arthur Engoron of New York state court in Manhattan ruled in favour of Attorney-General Letitia James in directing Mr Trump, his son Donald Trump Jr and his daughter Ivanka Trump to testify.

Mr Engoron said Ms James had “the clear right” to issue her subpoenas and question the Trumps after having uncovered “copious evidence of possible financial fraud”. Failing to issue subpoenas “would have been a blatant dereliction of duty”, Mr Engoron wrote.

“Today, justice prevailed,” Ms James said in a statement. “No one will be permitted to stand in the way of the pursuit of justice, no matter how powerful they are. No one is above the law.”

The decision followed a two-hour hearing in which the Trumps’ lawyers accused Ms James of doing an end run around their clients’ constitutional rights by seeking testimony she could then use against them in a parallel criminal investigation.

Trump attorney Alina Habba accused Ms James of “selective prosecution and prosecutorial misconduct that this country has never seen”, citing what she called Democratic attorney-general’s “vile disdain” for Mr Trump, a Republican.

“If he was not who he is, she would not be doing this,” Ms Habba said. “This court can help stop this circus.”Mr Trump in a statement issued later on Thursday called the accusations false and accused Ms James of a political agenda in targeting him and his family.

“It is a continuation of the greatest Witch Hunt in history - and remember, I can’t get a fair hearing in New York because of the hatred of me by judges and the judiciary. Its not possible!,” Mr Trump said.

Last month, Ms James said her nearly three-year investigation into the Trump Organisation had uncovered significant evidence of possible fraud.

She described what she called misleading statements about the values of the Trump brand and six properties, saying the company may have inflated real estate values to obtain bank loans and reduced them to lower tax bills.

The Trumps have not been accused of criminal wrongdoing.

Mr Engoron declined the Trumps’ request to put Ms James’ case on hold while the criminal case, led by Manhattan District Attorney Alvin Bragg, is pending. Ms James joined that probe last May.

The criminal investigation, begun by Mr Bragg’s predecessor Cyrus Vance, resulted last July in tax fraud charges against the Trump Organisation and its longtime chief financial officer Allen Weisselberg. Both pleaded not guilty.

Mr Engoron said the argument that Ms James was trying to bypass grand jury protections, which would give the Trumps immunity, by issuing civil subpoenas “completely misses the mark”.

He said the Trumps could refuse to answer questions, noting that Mr Trump’s other adult son Eric Trump invoked his constitutional right against self-incrimination more than 500 times when the attorney-general’s office questioned him in 2020.

The judge also rejected the Trumps’ claim that Ms James’ sometimes aggressive public statements about investigating Mr Trump, including a pledge that “we’re definitely going to sue him”, illustrated the “impropriety” of her probe.

Mr Engoron said the spark for the investigation was not Ms James’ dislike of the former president, but rather congressional testimony from Mr Trump’s former personal lawyer Michael Cohen that the Trumps were “cooking the books”. The judge also noted Mr Trump’s history of investigations by the attorney-general’s office, including “significant settlements” with Ms James’ predecessors concerning a namesake university and charitable foundation.

Mr Trump is suing to try to stop Ms James’ investigation. He has not said whether he will run for president again in 2024.

Mr Engoron ruled after Mr Trump’s longtime accounting firm Mazars USA decided last week to cut ties with him and the Trump Organisation, saying it could no longer stand behind a decade of financial statements despite finding no material discrepancies.

The Trump Organisation said Mazars’ findings effectively rendered Ms James’ and Mr Bragg’s investigations “moot”. Washington DC’s attorney-general is separately suing the Trump Organisation and Mr Trump’s inaugural committee over the alleged misuse of US$1.1 million (S$1.5 million) of charitable funds. A Sept 26 trial date was set on Thursday.

The investigation partially overlaps a criminal probe now led by Manhattan District Attorney Alvin Bragg in which the Trump Organisation and its longtime chief financial officer pleaded not guilty last July to tax fraud charges.

James joined that probe last May.

Trump, who has not announced whether he will run again for president in 2024, has called James' investigation a political "witch hunt" and is suing to try to stop it.

The hearing followed last week's decision by Trump's longtime accounting firm Mazars USA to cut ties with him and the Trump Organisation, saying it could no longer stand behind a decade of financial statements.

Lawyers for Donald Trump have said he did not know enough to respond to allegations of inaccurate valuations, though Trump detailed some possible discrepancies in a five-page statement on Tuesday.

The Trumps have not been accused of criminal wrongdoing.

Washington DC's attorney-general is separately suing the Trump Organisation and Trump's inaugural committee over the alleged misuse of US$1.1 million of charitable funds. A Sept 26 trial date was set on Thursday.