28-year-old Alex Mutungi Mutuku was on Tuesday charged with hacking into the Kenya Revenue Authority system and causing loss of about Sh4 billion.
He is accused of committing the offense between March 2015 and March this year.
Mr Mutungi denied charges of electronic fraud and interference with KRA’s computers before Chief Magistrate Francis Andayi.
He is accused of fraudulently causing the loss of Sh3, 985,663,858 from the Kenya Revenue Authority after allegedly interfering with the taxman’s systems.
He was arrested as a result of a multi-agency security operation was conducted within Nairobi after police received information that banks and other institutions were losing cash through suspicious electronic transactions.
The court heard that several electronic gadgets, including mobile phones, computers, hard drives, digital video recorders and servers were seized during the operation and forwarded to the cyber forensic laboratory for analysis.
Prosecution lawyers Edward Okello and Kadebe, also told court that a printout of data from seized items would fill two large rooms.
They claimed that data analysis indicates the accused worked with suspects outside the country.
Defence lawyer Ms Tacey Makori urged the court to consider the penalty for the offense allegedly committed which is a jail term of three years or a maximum fine of Sh 200,000 instead of the value of the monies in the charge he is currently facing.
The court will rule on whether he will be released on bond on March 28.