An aerial view shows Google’s “Googleplex” corporate office in Mountain View, California on May 20, 2026.
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A Google software engineer has been charged with using confidential company information to make $1.2 million on Polymarket, in the second known federal criminal case connected to lucrative trades on a prediction market site.
Michele Spagnuolo, 36, an Italian citizen who lives in Switzerland, was arrested on Wednesday and charged with commodities fraud, wire fraud, money laundering and other counts for allegedly placing bets on search trends based on internal Google data that tracked user searches.
“Unlike the counterparties to his trades, Spagnuolo knew the outcome of these wagers before the trading public did because he had accessed Google’s confidential, commercially valuable internal data,” according to the federal indictment, which authorities unsealed on Wednesday.
Prosecutors say Spagnuolo, operating under the username AlphaRaccoon, placed a wager that Google’s most-searched person in 2025 would be the rapper known as D4vd, just when most Polymarket traders “assigned near-zero probability” to the singer, who has been charged with murder, being the No. 1 most-Googled person last year.
The charging documents say once Spagnuolo transferred his winnings out of his cryptocurrency wallet, he removed the name AlphaRaccoon from his Polymarket account.
The Commodity Futures Trading Commission brought a separate civil case against Spagnuolo for allegedly violating commodities law.
Spagnuolo did not return a request for comment.
Google said in a statement that the company cooperated in the federal government’s investigation into Spagnuolo, who has been placed on leave.
“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,” said Google spokesperson Jaclyn Vazquez.
Olivia Chalos, Polymarket’s chief legal officer, said in a statement that it “is the only prediction platform to date whose cooperation has led to insider trading charges in the United States,” adding that, since users on the site use crypto to trade, it is “transparent, traceable and bad actors leave footprints.”
While the laws that apply to the prediction market industry are less strict than stock market rules, what’s commonly understood as “insider trading,” or abusing non-public confidential information for profit, is illegal under federal law.
But in prediction market forums on messaging sites such as Discord, users scour markets for large, unusual trades and encourage others to follow those bets with their own wagers.
“AlphaRaccoon has alpha,” said one user on Discord, using the slang term for any information that gives you an edge on prediction markets, pointing to Spagnuolo’s large bets on the most-Googled person of the year before Google had released it. “Check AlphaRaccoon account” said another user when asked how they should bet on the market.
Prediction markets sites such as Kalshi and Polymarket have erupted in popularity in President Trump’s second term, allowing anyone to bet on company announcements, geopolitical events, the outcome of art auctions, elections and a seemingly endless array of other topics.
And as more and more people seek profits in every facet of modern life, online sleuths have increasingly identified wagers that appear too good to be true, suspiciously confident long-shot bets that have netted prediction market traders six- or seven-figure profits.
In one such instance last month, a master sergeant with the U.S. Army Special Forces was charged with using classified information about the capture of Venezuelan leader Nicolás Maduro to rake in more than $400,000 on Polymarket.
The Spagnuolo indictment was unsealed a day after President Trump vowed on Truth Social to allow the prediction market industry to “thrive” by asserting federal regulators’ “exclusive authority” over the controversial betting sites.
For months, administration officials have been fighting state officials in court over who should police the prediction market industry.
State officials say the platforms are essentially gambling operations and should be subject to state gambling rules, whereas the Trump administration views Polymarket and Kalshi as offering a type of “futures contract” that falls under the umbrella of the Commodity Futures Trading Commission, which has historically overseen markets on things like grain futures, crude oil and precious metals.
Polymarket’s most popular platform, which is based in Panama, is technically inaccessible to American users. It was forced to shut down its U.S. operation in 2022 as part of a settlement with federal regulators who said the site was operating without a trading exchange license.
Two years later, the FBI raided the apartment of the company’s founder, Shayne Coplan, as part of a probe into whether Polymarket was violating that agreement.
The Trump administration dropped that investigation. Trump officials even invited Coplan to the White House for a summit on cryptocurrency.
The president’s oldest son, Donald Trump Jr., is an advisor to Polymarket and Kalshi, and a partner in 1789 Capital, which is a major investor in Polymarket.
