A New York state judge has ordered that an independent monitor be appointed to oversee the Trump Organization before a civil fraud case by the state’s attorney-general against Donald Trump’s company goes to trial.

The judge, Justice Arthur Engoron, is presiding over state Attorney-General Letitia James’ $US250 million ($397 million) lawsuit accusing the former US president, his company and three of his adult children of overvaluing assets and Trump’s net worth through a decade of lies to banks and insurers.

Last month, Attorney-General James asked the Manhattan-based judge to appoint a watchdog to halt “staggering” fraud at the company and keep the Trumps from transferring assets out of her reach.

Citing the “persistent misrepresentations” throughout Mr Trump’s statements of financial condition from 2011 to 2021, Justice Engoron called appointing a monitor “the most prudent and narrowly tailored mechanism to ensure there is no further fraud or illegality” that violates the state law Attorney-General James is trying to enforce.

In a Thursday hearing on whether the judge should appoint a monitor, Justice Engoron focused on Attorney-General James’s accusation that in 2015 Mr Trump said his penthouse apartment atop Manhattan’s Trump Tower was nearly triple its actual size, giving it an inflated $US327 million valuation. No apartment in Manhattan has sold for that much.

“You said experts can disagree” on valuation, the judge told Christopher Kise, a lawyer for Mr Trump. “But does there reach a point it’s just not a disagreement … but bad faith?”

Mr Kise argued the attorney-general’s demand for a monitor was a “manufactured emergency” coming before next Tuesday’s midterm election that will determine which party controls the US Congress.

Mr Kise also said Attorney-General James no legal authority to challenge how Trump valued his properties, calling it a private matter between Mr Trump’s company and its lenders and insurers.

Kevin Wallace, a lawyer from Attorney-General James’ office, countered that it was important to the public to maintain an “honest and fair business environment” in the state.

The Trump Organisation manages hotels, golf courses and other real estate around the world, and had been under investigation by Attorney-General James for more than three years.