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The Trump Organization did not respond to a request for comment.

New York law allows the attorney general to seek restitution and damages — and, in extreme cases, dissolution — if a business is found to have engaged in persistent fraud. There’s also the Martin Act, a 1921 statute designed to protect investors.

Past attorneys general have used the Martin Act, considered to be the U.S.’s toughest such state statute in this realm, to expand their powers in the financial crimes sector. The law empowers the attorney general to subpoena witnesses and documents for information pertaining to possible fraud.

“The Martin Act gives really broad powers,” said Dennis Vacco, a Republican who served as New York attorney general from 1995 to 1998. (Vacco declined to comment on whether Trump or associates have sought his legal counsel regarding this investigation.)

Vacco said the Martin Act is one of few in the nation that provides the attorney general with criminal investigative authority without having to first receive a referral from the governor or a state agency and he noted that a criminal prosecution often will start off as a civil investigation, which is what the Trump Organization is currently facing.

The statute “really does apply to almost any financial transaction in New York state,” he said.

Koppell said that it was former Democratic New York Attorney General Eliot Spitzer, who served from 1999 to 2006, who wrote the modern playbook that James could follow. Spitzer “really kind of expanded the scope of attorney general work in the area of financial fraud,” Koppell said.

Spitzer, who later was elected governor only to resign amid a prostitution scandal in 2008, aggressively pursued white-collar crimes like securities fraud and used statutes such as the Martin Act to pursue prosecutions that had been typically left for federal authorities.

Spitzer’s investigation of American International Group and its then-CEO Maurice “Hank” Greenberg, for example, may have parallels to James’ latest lines of inquiry into Trump’s businesses. The then-attorney general alleged that the insurance giant’s top executives engaged in fraudulent business practices. Those executives settled with the state in 2017, agreeing to forfeit about $10 million in performance bonuses, a fraction of what New York sought.

Through a spokesperson, Spitzer declined to comment to NBC News.

Could James dissolve the Trump Org?

It’s rare for the attorney general to seek the dissolution of a business, but it has happened. In 1994, the state closed down an education company that repeatedly failed to comply with student loan regulations.

In “People by Abrams v. Oliver School,” a New York appellate court affirmed the dissolution and said the power was typically used “as a remedy for persistent consumer fraud.”

The power has been described by the state Supreme Court as a “judgment of corporate death,” with the offending company’s transgressions needing to be so serious “as to harm or menace the public welfare” in order for it to be an appropriate remedy.

The public first became aware of James’ new inquiry into Trump and his business after she recently subpoenaed Deutsche Bank and Investors Bank for records regarding some of Trump’s business dealings and his failed 2014 effort to buy the NFL’s Buffalo Bills. Like her office’s ongoing probe into the Trump Foundation, which led to the dissolution of the president’s charity, the latest inquiry into Trump’s business dealings is a civil investigation.

James opened the probe after Michael Cohen, the president’s former attorney, testified to Congress last month that Trump inflated the worth of his assets in financial statements that he provided to banks to secure loans. A source familiar with James’ investigation told NBC News the probe appears to be moving quickly.

It is not yet clear what the scope or focus of James’ new probe is, but former New York attorneys general told NBC News that she could use her office’s sweeping powers as part of an investigation into whether Trump had defrauded consumers, which is when those powers are typically used, or financial institutions.

“The DNA of the conduct is the same, whether it’s defrauding a financial institution or defrauding investors or consumers,” Vacco said, adding that he was not vouching for the basis of James’ investigation. “Because, at the end of the day, it’s still fraud.”

“In this instance, it’s a legitimate business (banks that loaned to Trump) that is being defrauded,” former New York Attorney General Robert Abrams, a Democrat who served from 1979 to 1993, told NBC News. “Decisions are being made against fraudulent information.”

“There’s a wide variety of roles and opportunities for enforcement of the law and protection for those who are being victimized by false representations, misleading statements, advertising information provided in the application process, whatever,” added Abrams, who said he went after businesses for fraud “virtually every day and every week.”

Jed Shugerman, a Fordham University law professor who advised Democrat Zephyr Teachout in her 2018 attorney general campaign, told NBC News that no matter what legal authority James is using to back her latest inquiry, she must be speedy. Shugerman said it would be unfortunate for the results of the probe to come to light close to the 2020 election, which could give critics of the investigation ammunition to attack it as partisan.

“Now we have this delicate balance of being able to move fast enough so that they can get evidence with civil subpoenas and civil process of discovery, but not so aggressively that they look to be moving politically with potentially abusing their power,” he said.

Nonetheless, the probe itself poses danger to Trump because of James’ broad powers, according to NBC News/MSNBC legal analyst Glenn Kirschner.

Kirschner, a former federal prosecutor, said if the documents James is seeking show that Trump misled banks about his assets, proving fraud “should be like shooting fish in a barrel for the New York AG.”

Allan Smith

Allan Smith is a political reporter for NBC News.