The Crime of Funds Employment Under Law No. 146 of 1988 and Court of Cassation Rulings | Lawyer Mohamed Mabrouk

The crime of funds employment is closely connected to protecting individuals’ money and maintaining the stability of financial transactions, particularly when funds are collected from the public for investment in violation of legal requirements. Lawyer Mohamed Mabrouk discusses the legal framework governing this crime under Egyptian Law No. 146 of 1988 concerning companies operating in the field of receiving funds for investment, highlighting the importance of Court of Cassation rulings in interpreting statutory provisions and identifying the elements that courts must examine in these cases.

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What Is the Crime of Funds Employment?

Under Law No. 146 of 1988, funds employment involves receiving money from the public for the purpose of employing, investing, or participating with those funds, within the scope of activities regulated by the law. The legislator established specific requirements for conducting this activity to protect fund owners and limit practices that could put their savings at risk.

Article 1 of the law generally prohibits receiving money from the public for these purposes except through joint-stock companies that offer their shares for public subscription and are registered in the relevant register maintained by the competent authority, subject to applicable related legislation.

However, not every private investment agreement automatically constitutes the crime of unlawful funds employment. The legal classification depends on the nature of the transaction, the parties involved, the method used to collect the money, and whether the statutory requirements apply to the specific circumstances.

What Is the Purpose of Law No. 146 of 1988?

The law was introduced to regulate companies that receive funds from the public for investment and to establish a legal framework identifying which entities may conduct this activity and the requirements they must follow.

Its main objectives include:

• Protecting depositors and investors against unlawful practices.

• Regulating the collection of public funds for investment.

• Establishing the legal framework for companies authorized to conduct this activity.

• Providing for legal liability when the law is violated.

• Regulating the return of money owed to its owners in cases covered by the law.

When examining a particular case, it is important to consult the applicable statutory provisions and amendments rather than relying solely on a company’s commercial name or its description of its activities.

What Are the Elements of the Crime of Unlawfully Receiving Funds?

Determining whether unlawful receipt of funds for investment has occurred requires examining the relevant legal and factual elements. A financial dispute between parties is not, by itself, sufficient to establish the crime.

Important matters to examine include:

Receiving funds from the public: It must be determined whether the funds were collected from an undefined group of people or whether the transactions were limited to specifically identified individuals connected by a private relationship.

Purpose of receiving the funds: The circumstances must establish whether the money was received for employment, investment, or participation within the meaning of the applicable law.

Legal status of the person or entity conducting the activity: The relevant requirements for legally receiving public investment funds must be examined, including any applicable registration or authorization requirements.

Evidence and circumstances: Depending on the case, relevant evidence may include documents, receipts, transfers, agreements, and the methods used to advertise or promote the activity.

The defendant’s liability and whether the elements of the crime have been established remain matters for the competent court to determine based on the facts and evidence presented.

How Has the Court of Cassation Addressed Funds Employment Cases?

Court of Cassation rulings are important in explaining how legal provisions apply to the facts presented before the courts. In funds employment cases, a key issue is whether the judgment adequately explains the facts necessary to determine whether the statutory requirements have been satisfied.

Important considerations when examining relevant rulings include:

• Whether the people from whom the funds were received qualify as the “public” within the meaning of the law.

• The nature of the relationship between the fund owners and the person receiving the money.

• How the invitation to collect funds was made and the methods used, where this is part of the accusation.

• Whether the judgment adequately explains the facts and evidence supporting the elements of the alleged crime.

• Whether the reasoning allows the Court of Cassation to review the proper application of the law.

Criminal rulings concerning Law No. 146 of 1988 have addressed these issues, highlighting the importance of distinguishing between collecting funds from the public as defined by the law and private transactions that may differ in nature and circumstances.

Does Everyone Who Receives Money from Others Commit the Crime of Funds Employment?

No general conclusion can be made on that basis alone. The key consideration is not simply whether money was received, but the nature of the activity, the purpose for collecting the funds, and whether the legal provisions apply to the transaction.

Some disputes may arise from loans, partnerships, or private agreements between identified individuals. Other cases may involve collecting money from the public for investment in a manner that violates statutory requirements. Distinguishing between these situations requires examining the documents, the relationships between the parties, and how the activity was presented to those providing the funds.

A financial loss or failure to repay money does not, by itself, establish the crime of funds employment. The elements of the alleged crime and the available evidence must be examined, while also considering whether another form of legal liability may apply.

What Penalties Does the Law Provide for Funds Employment Crimes?

Law No. 146 of 1988 contains provisions establishing penalties for certain forms of receiving funds in violation of its requirements. It also addresses the return of money owed to fund owners in the circumstances specified by law.

The legal consequences depend on the conduct alleged and the statutory provision applicable to the case. The relevant provisions must therefore be reviewed in their applicable form, taking into account any amendments that may affect the outcome, before determining the potential penalty or financial obligations in a particular case.

A single penalty should not be assumed to apply to every case described as funds employment. The legal classification and judicial outcome depend on the specific facts of each case.

Why Are Documents Important in Funds Employment Cases?

Documents help establish the nature of a financial transaction, the purpose for which money was received, the people involved, and the obligations agreed upon by the parties.

Depending on the circumstances, relevant documents may include contracts, receipts, bank transfers, correspondence, and advertisements relating to the activity, as well as evidence showing how the funds were collected and whether there was an agreement concerning their investment or repayment.

Reviewing these materials is important in determining whether the transaction falls within the scope of Law No. 146 of 1988 and in assessing the evidence supporting the allegations or the defense.

What Should Be Examined When Someone Is Accused of Funds Employment?

Handling these cases requires a careful review of the case file. Important issues include:

• The statutory provision on which the accusation is based.

• The nature of the activity conducted.

• The number and identities of the fund owners and their relationship with the person conducting the activity.

• The methods used to collect the funds and the stated purpose of collecting them.

• Documents concerning the receipt, investment, and repayment of the funds.

• The evidence relied upon in the judgment, if a judgment has already been issued.

• Relevant judicial principles and whether they apply to the facts of the case.

A previous ruling should not be relied upon merely because it concerns a case with a similar title. Its facts, legal reasoning, and relevance to the current dispute must also be examined.

Law No. 146 of 1988 regulates companies operating in the field of receiving funds for investment and establishes legal requirements intended to protect the public’s money. Determining whether a particular transaction constitutes the crime of funds employment requires examining the purpose of receiving the money, how it was collected, the relationships between the parties, and whether the statutory elements are satisfied.

Court of Cassation rulings help explain how these requirements are applied, particularly in relation to the meaning of the public and the need for judgments to adequately explain the relevant facts and evidence. The legal outcome, however, remains dependent on the circumstances of each case, its supporting documents, and the applicable statutory provisions.