Google engineer charged in $1.2M Polymarket insider case

U.S. prosecutors in Manhattan unsealed charges Wednesday against Michele Spagnuolo, a Google software engineer, accusing him of accessing unpublished internal Google data about the most-searched people for 2025 and placing 25 bets totaling $2.7 million on Polymarket.

The wagers, placed under the account “AlphaRaccoon”, returned about $1.2 million in profits on outcomes the market had treated as unlikely until Google published the data in December.

The federal indictment charges Spagnuolo with commodities fraud, wire fraud and money laundering. Prosecutors allege he routed funds through a decentralized crypto swapping service and an unnamed transfer service that provides privacy protections for blockchain transactions.

Authorities say the AlphaRaccoon username was changed to a wallet address after online communities on Discord and X began suggesting the account belonged to a Google insider.

If convicted on all counts, Spagnuolo faces a statutory maximum of 50 years in prison.

The Commodity Futures Trading Commission filed a parallel civil complaint the same day seeking restitution, disgorgement, civil monetary penalties and bans on trading and registration.

In a statement, Manhattan U.S. Attorney Jay Clayton wrote, “Corporate insiders cannot use confidential business information to turn a profit in our markets.”

David Miller, director of enforcement at the CFTC, said the agency will act to police use of inside information in prediction markets and other markets the commission oversees, adding the division will “continue to take action to protect markets from insider trading and other forms of fraud, abuse and manipulation.”

The charges come amid increased regulatory scrutiny of prediction markets. Congress has opened an inquiry into Polymarket and Kalshi to examine suspected insider trading and whether officials or other parties used privileged information to place bets.

In April, the DOJ  arrested a U.S. soldier for allegedly using classified information to place bets on the capture of former Venezuelan president Nicolás Maduro, a separate enforcement action cited by authorities.