One example of allegedly improper use of funds came in 2014, during a charity auction at Trump’s Mar-a-Lago Club in Palm Beach, Florida.

The Trump family lawyer Alan Futerfas insisted there was nothing untoward – or even intentional – about the foundation’s purchase of the two-metre tall artwork, the proceeds of which benefited another not-for-profit.

“Some artist puts a painting up for auction, so Mr Trump donates US$10,000 to start the bidding,” Futerfas told the Manhattan Supreme Court justice Saliann Scarpulla. “And then when the auction goes on, and no one else bids, he buys the painting.”

The controversial purchase, albeit bordering on comedic, is far from the most serious allegation of financial misconduct in this litigation.

The state attorney general’s office has charged that nearly US$3 million in foundation-raised charitable funds illicitly bolstered Trump’s presidential campaign.

The money was among US$5.6 million raised during a Des Moines, Iowa, fundraiser on January 28, 2016.

Trump was reportedly at odds with Fox News, which was presenting a debate at the Iowa Events Centre when the fundraiser took place. In lieu of participating in the debate, Trump held a fundraising rally for veterans’ causes at a nearby university, according to the Des Moines Register. About half of the donations went directly from private citizens to various veterans charities.

The remaining US$2.8 million that went to Trump’s foundation effectively served as free publicity for his campaign – because Trump made a big show of doling out the money to these charities, the state attorney general’s office has charged.

The office also contends that while this money was distributed from the foundation to charities, former campaign manager Corey Lewandowski played a heavy hand in who got the funds.

The New York state attorney general argues that the not-for-profit’s board – not Lewandowski – should have decided how to distribute the funds.

By letting Lewandowski make these calls, Trump’s foundation violated regulations governing not-for-profits’ handling of money.

Futerfas disputed that the charity rally had any ulterior motives – and said that it was a positive change from politics as usual.

“If he wanted more press, he could have gone and done the debate,” Futerfas said.

“Candidates are out raising money all the time so they can buy ads, so they can send email blasts, so they can do all the things … bashing the other candidate and doing all the stuff that we’re used to in American campaigns.

“It’s actually a little refreshing that a candidate said, ‘You know what, I’m not going to go there,’” Futerfas said of his notoriously bombastic client.

The ongoing defamation lawsuit filed by the former Apprentice contestant Summer Zervos against Trump also came up in court.

Zervos charges Trump wrongly smeared her by saying her allegations of sexual misconduct against him are lies.

Trump is asking the state appeal court to reverse a lower court’s decision that permitted Zervos’s lawsuit to go forward.

Trump’s lawyers contend that a sitting president cannot be sued in state court, claiming it stands in conflict with a constitutional premise that federal law is the ultimate law of the United States.

Both Trump and Zervos’s lawyers appealed in a state appeal court last week where they argued this issue.

Scarpulla said that if the appeals panel rules in favour of Trump, he may get released from the New York state attorney general’s lawsuit against his charity – but that it wouldn’t necessarily lead to dismissal of the case outright.

“I don’t think it’s going to completely remove the action,” she said.