Assistant Justice Minister Assem al-Gohary told the Middle East News Agency Alaa Mubarak is among three Egyptians suspected of forming a criminal gang to launder money.
Gohary is head of a judiciary committee charged with restoring smuggled Egyptian funds.
He said Monday a Swiss law firm has been hired to represent the Egyptian government as a party in the money laundering investigation.
Also being investigated are former Egyptian Tourism Minister Zoheir Garana and businessman Yassin Mansour.
Gohary said the judiciary committee has learned Alaa and Gamal Mubarak have $340 million in Swiss banks, $300 million of which belongs to Alaa.