Questioning began of former Egyptian president Hosni Mubarak on Tuesday in the city of el-Tor, in the South Sinai province, a security source told DPA.
Mr. Mubarak arrived in an armoured vehicle, amid tight security to a military unit in the province. Nearby buildings were evacuated.
Mr. Mubarak and his family are reportedly under house arrest in a sprawling compound in the Red Sea resort of Sharm el-Sheikh, also in South Sinai province, since stepped down on February 11 following an 18-day uprising across the country.
Activists have staged demonstrations demanding a speedy trial for Mubarak and his aides for allegedly pocketing the equivalent of billions of dollars of state money during decades of power.
Mr. Mubarak denied having assets abroad and pledged full cooperation with authorities, in an audio message broadcast by Al Arabiya channel on Sunday.
Egypt has slapped a travel ban on Mr. Mubarak, his wife and children while allegations of embezzlement are investigated.
The former President is believed to have amassed a huge fortune during his nearly 30 years in power. His wealth, according to some estimates published in international media, might be over 40 billion dollars and includes properties in London, New York and Los Angeles.