New York Attorney General Letitia James filed a civil lawsuit Wednesday accusing former President Trump and members of his family of financial fraud and referring them to federal prosecutors and the IRS for criminal investigation.

Why it matters: Trump now faces legal peril in at least three distinct cases, one in New York, one in Georgia and one regarding classified materials — right ahead of midterms and his decision on whether to announce a 2024 presidential campaign. 

• James, a Democrat up for re-election in November, signaled she would sue after rejecting a settlement offer from Trump's lawyers this month.

What to watch: If brought to trial in James' civil lawsuit, the Trump Organization could face severe financial penalties and restrictions on its ability to operate in New York state.

• There was no immediate indication Wednesday whether the Southern District of New York or the IRS had agreed to open a criminal investigation after James' referral.
• “We are aware of the New York Attorney General’s referral, and beyond that decline to comment further," Nicholas Biase, chief of public affairs for SDNY, told Axios.

The big picture: Trump's business practices and finances have come under intense scrutiny at the federal, state and congressional levels in the seven years since he entered the political scene.

• Trump Organization CFO Allen Weisselberg struck a plea deal with the Manhattan district attorney last month in which he admitted to running a years-long tax fraud scheme in coordination with the former president’s business.
• Weisselberg is expected to testify against the company — which as an entity was also charged by the DA last year — when the case goes to trial next month.
• But the DA's investigation has thus far failed to ensnare Trump himself, and Weisselberg is not expected to implicate the former president in his testimony.

Between the lines: Trump has denied wrongdoing in any of the investigations that prosecutors or members of Congress have pursued over the last seven years, using the allegations to whip up his base and cast himself as the victim of a long-running partisan "witch hunt."

• Trump has had an especially combative relationship with James, who called him an "illegitimate president" and pledged to aggressively investigate his business during her 2018 campaign for attorney general.
• Trump invoked his Fifth Amendment right against self-incrimination during an hours-long, court-ordered deposition with James' office last month.

What they're saying: "Another Witch Hunt by a racist Attorney General, Letitia James, who failed in her run for Governor, getting almost zero support from the public, and now is doing poorly against Law & Order A.G. candidate," Trump wrote on Truth, his social media platform.

• "She is a fraud who campaigned on a 'get Trump' platform, despite the fact that the city is one of the crime and murder disasters of the world under her watch!" he added.

Zoom out: While the New York AG's lawsuit and criminal referral have opened up a serious new front in Trump's legal battles, the more serious and imminent threats he faces stem from the federal investigations into his handling of classified documents and role in the Jan. 6 Capitol attack.

Editor's note: This article was updated with comment from Trump.