Google Employee Charged with Fraud After $1.2 Million Polymarket Insider Trading Bet

Federal prosecutors charged a Google staff information security engineer with fraud on Wednesday, alleging he netted $1.2 million by placing bets on the prediction market platform Polymarket using confidential, nonpublic data he accessed through his employer.

Michele Spagnuolo faces charges of money laundering, commodities fraud, and wire fraud. The complaint was filed in the Southern District of New York and unsealed Wednesday. Spagnuolo was arrested Wednesday morning in New York, appeared before a federal magistrate judge, did not enter a plea, and was released on a $2.25 million bond.

At the center of the case is Google's annual "Year in Search" data — an internal ranking of the most searched terms and people on the platform. Prosecutors allege Spagnuolo had access to a Google internal software tool that gave him confidential, nonpublic visibility into those results before they were made public.

According to the complaint, Spagnuolo used that access to correctly predict that singer d4vd would be Google's most searched person in 2025 — and placed trades on Polymarket accordingly. The platform publicly announced its Year in Search 2025 results on or about December 4, 2025, at which point Spagnuolo's account, operating under the handle "AlphaRaccoon," collected approximately $1.2 million in winnings.

Observers of the Polymarket platform had flagged the AlphaRaccoon account as far back as December for suspicious trading patterns on "most searched person" contracts. The complaint confirmed Spagnuolo was the person behind that account.

The alleged scheme extended beyond a single bet. The complaint detailed that Spagnuolo also correctly predicted the outcomes of multiple other search-related markets, including contracts tied to whether Zohran Mamdani would rank in the top five most searched and whether Squid Game would be the number one searched TV show.

In addition to the criminal charges, Spagnuolo faces a parallel civil case from the Commodity Futures Trading Commission. The CFTC alleged that "Spagnuolo misappropriated the material Confidential Information by knowingly or recklessly using it to trade the 2025 Year in Search List Contracts in breach of his duties of trust and confidentiality."

Google confirmed it is cooperating with investigators. "The employee accessed our marketing material using a tool available to all employees, but using such confidential information to place bets is a serious breach of our policies," the company said in a statement. "We've placed the employee on leave and will take the appropriate action."

Polymarket, for its part, said its cooperation with prosecutors drove the outcome. "Polymarket worked closely with the U.S. Attorney's Office for the Southern District of New York and the CFTC, and is the only prediction platform to date whose cooperation has led to insider trading charges in the United States," a company spokesperson said in a statement.

The case is the second high-profile insider trading prosecution tied to Polymarket in just over a month. In April, then-active U.S. Army Special Forces master sergeant Gannon Ken Van Dyke was arrested on charges that he used classified information to bet on contracts related to a U.S. operation targeting Venezuelan President Nicolás Maduro. Prosecutors said Van Dyke made more than $400,000 from those trades.

The back-to-back cases signal that federal authorities are treating prediction market platforms with the same scrutiny applied to conventional financial exchanges — a posture that could reshape how platforms like Polymarket engage with regulators going forward.

Disclaimer