The prosecution's decision came hours after social media posts showed a crowd gathering at a privately-owned auto showroom to retrieve their money from the owner. They said the owner had collected large sums of money from them under the claim of investing them in commercial activities, such as car trade and real estate.
The alleged fraudster has been in custody since April.
The people assembled at the site after rumours had circulated that the showroom owner was released, according to local news website Cairo24.
The prosecution released a statement on Monday saying the accused had already been referred to a criminal court over accusations of collecting money from people without a licence for investment.
The statement added the 26 people arrested had blocked a road and interrupted a train line, according to a police report.
The prosecution added the initial investigation – after inspecting the incident site – showed that a car tire was burnt along the railway track.
The arrested crowd denied the accusations during interrogation, said the prosecution, adding that investigations are ongoing.
Many people have fallen victim to similar fraud incidents over the years, with many fraudsters arrested by security authorities and others fleeing with a large amount of money.