Feds charge Google staffer over $1.2m Polymarket scheme
Table of contents
- Federal prosecutors and the CFTC announced charges against Google software engineer Michele Spagnuolo on May 27, alleging he used confidential company data to trade on prediction market platform Polymarket.
- Spagnuolo allegedly placed approximately $2.75 million across at least 23 Google Year in Search-related contracts, generating approximately $1.2 million in profits.
- The case is the second known federal criminal prosecution this year involving alleged insider-style trading on a prediction market, intensifying scrutiny of the sector.
A Google software engineer has been charged by federal prosecutors in New York with commodities fraud, wire fraud and money laundering, following allegations he used confidential internal company data to profit on prediction market platform Polymarket.
Michele Spagnuolo, 36, an Italian national residing in Switzerland, allegedly misappropriated nonpublic Google search trend data to place bets tied to the company’s 2025 Year in Search campaign. A criminal complaint and a parallel CFTC civil complaint were both unsealed on May 27, 2026.
The alleged scheme
Google’s Year in Search is an annual marketing campaign revealing the most popular searches of the preceding year. Spagnuolo allegedly accessed a confidential internal tool to obtain data on the most-searched celebrities before that information was made public.
He is alleged to have used a Polymarket account under the name “AlphaRaccoon” to bet on contracts tied to which figures would rank among the most searched. Using the nonpublic data as a guide, he placed approximately $2.75 million across at least 23 related contracts, according to the CFTC complaint.
One bet, that singer D4vd would be the most searched person on Google in 2025, was placed when Polymarket had assigned a near-zero probability to that outcome. Google officially announced its Year in Search 2025 results on or about December 4, 2025. Spagnuolo’s AlphaRaccoon account subsequently recorded approximately $1.2 million in profits.
Jay Clayton, United States Attorney for the Southern District of New York, said:
“Today’s charges reinforce a decades-old message: corporate insiders cannot use confidential business information to turn a profit in our markets. As alleged, Spagnuolo violated the duties he owed to his employer and used Google’s confidential business information to make more than $1.2 million in trading profits on Polymarket.
“Insider trading compromises the integrity of our markets, and the American people want this greed-driven conduct investigated and prosecuted.”
Spagnuolo appeared before US Magistrate Judge Sarah Netburn on Wednesday and was released on a $2.25 million bond. His attorney declined to comment.
Wider enforcement picture
The case is the second known federal criminal prosecution this year involving alleged insider-style trading on a prediction market.
Earlier in 2026, the US Attorney’s Office for the Southern District of New York charged a US special forces soldier with allegedly using advance knowledge of a planned military operation in Venezuela to place profitable bets on Polymarket. The soldier allegedly made over $400,000 and has pleaded not guilty.
Google confirmed it is cooperating with authorities. A spokesperson said:
“We’re working with law enforcement on their investigation. 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. We’ve placed the employee on leave and will take the appropriate action.”
The charges arrive as prediction markets face escalating regulatory and legal pressure across multiple fronts. Polymarket introduced enhanced market integrity rules in March 2026, explicitly prohibiting trading on stolen or confidential information.
Minnesota has moved to ban prediction market operations within the state, though the law faces a legal challenge from the Trump administration. The CFTC, meanwhile, is in active litigation with Arizona, Connecticut and Illinois over federal versus state jurisdiction on event contracts.
The Spagnuolo case adds a dimension beyond political insider risk. It points to the threat posed by corporate employees with privileged data access, a category that is harder for platforms to screen and regulators to anticipate.
The prosecution clearly shows that federal enforcement agencies are treating prediction market integrity as a serious priority. The blockchain infrastructure that gives these platforms their transparency credentials cuts both ways: the same on-chain visibility that builds user trust also makes large-scale suspicious activity traceable and prosecutable.
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