Michele Spagnuolo, a software engineer at Google $GOOGL, was charged Wednesday with commodities fraud, wire fraud, and money laundering for allegedly using confidential company data to generate approximately $1.2 million in profits on the prediction market platform Polymarket.
Federal prosecutors in the Southern District of New York allege that Spagnuolo, a 36-year-old Italian citizen residing in Switzerland, accessed an internal Google software tool — marked "Google Confidential" in red text — to obtain nonpublic data about Google's 2025 Year in Search results. He then used that information to place trades on Polymarket between October and December 2025, risking roughly $2.7 million across at least 23 contracts tied to the annual search rankings. He used the account name "AlphaRaccoon" on the platform.
The charges carry a combined maximum sentence of 50 years in prison. Spagnuolo appeared before U.S. Magistrate Judge Sarah Netburn on Wednesday and was released on a $2.25 million bond. His attorney, Mike Ferrara, declined to comment on the charges, according to Bloomberg.
Among the bets prosecutors detailed, Spagnuolo placed a wager that singer D4vd would rank as Google's most-searched person of 2025 — a contract that Polymarket had assigned a near-zero probability at the time. When Google publicly announced its Year in Search results on December 4, 2025, confirming D4vd as the top-searched person, Spagnuolo's account collected roughly $1.2 million in profits.
When speculation emerged on X $TWTR and Discord in December 2025 about whether AlphaRaccoon had access to Google's internal data, Spagnuolo responded by renaming the account and routing transactions through a cryptocurrency privacy tool to conceal his tracks, according to Bloomberg.
Separately, the Commodity Futures Trading Commission brought a civil action against Spagnuolo, requesting that the court order him to return ill-gotten gains, pay monetary penalties, and face bans on trading and registration.
"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," Google said in a statement. "We've placed the employee on leave and will take the appropriate action."
Polymarket credited its own market integrity systems with identifying Spagnuolo's suspicious activity and said the company's referral to law enforcement was what triggered his arrest. "With 2 out of 2 arrests in this industry resulting from our criminal referrals, Polymarket has emerged as the enforcement leader," the company said in a post on X.
The case is the second high-profile insider trading prosecution tied to Polymarket in recent months. A U.S. Army Special Forces master sergeant was charged with using classified military intelligence to place bets on contracts related to the capture of Venezuelan President Nicolás Maduro, netting roughly $410,000. That soldier, Gannon Ken Van Dyke, has pleaded not guilty. The case against Spagnuolo comes amid a broader congressional investigation into insider trading on Polymarket and its rival Kalshi, with more than 10 bills targeting prediction markets introduced in Congress this year.