Federal prosecutors in New York have charged a Google engineer with fraud-related offenses after alleging he used confidential company information to place profitable bets on the prediction platform Polymarket.

Authorities said Michele Spagnuolo, a 36-year-old Google information security engineer, earned roughly $1.2 million through wagers tied to Google’s Year in Search data before those results became public. Prosecutors unsealed the criminal complaint Wednesday in the Southern District of New York, accusing him of commodities fraud, wire fraud, and money laundering.

Investigators alleged that Spagnuolo accessed internal Google systems that tracked user search trends and used that information to gain an advantage over other Polymarket traders. According to court documents, he placed bets under the username AlphaRaccoon.

According to ABC News, the complaint stated, “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.”

Prosecutors Detail Alleged Use of Internal Search Data

Federal authorities said Spagnuolo had access to confidential Year in Search information through internal Google software tools available to employees. Prosecutors alleged that he improperly used those materials between October and December 2025 to place approximately $2.7 million in bets connected to Google-related prediction markets.

One of the largest alleged wins involved betting that singer D4vd would become Google’s most searched person of 2025. Court filings said Polymarket considered that outcome highly unlikely at the time the wager was placed.

The complaint stated that the platform “assigned a near-zero probability to d4vd being ‘the #1 searched person on Google this year.'” Prosecutors said Spagnuolo already knew D4vd had reached the top search position because he had viewed internal company information before Google publicly released the rankings.

Authorities also said he successfully predicted outcomes connected to other search-related contracts, including questions about whether Zohran Mamdani would rank among the five most searched people and whether “Squid Game” would become the year’s most searched television show.

The Commodity Futures Trading Commission (CFTC) separately filed a civil insider trading case against Spagnuolo. According to that complaint, “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.”

Arrest in New York and Bond Release

Although Spagnuolo is an Italian citizen living in Switzerland, authorities arrested him Wednesday morning in New York. He later appeared briefly before a federal magistrate judge.

He did not enter a plea during the hearing. The court released him on a $2.25 million bond secured with $1 million in cash, with $50,000 required to be posted immediately.

The FBI said investigators connected cryptocurrency transactions and multiple accounts allegedly linked to the AlphaRaccoon profile. According to the investigation, one account was opened using an Italian identification card that helped authorities trace the activity back to Spagnuolo.

Online profiles cited in reports indicate that Spagnuolo worked at Google for more than 12 years in information security roles.

Court papers also alleged that after collecting profits from the prediction markets, Spagnuolo attempted to hide the origin of the proceeds. Prosecutors wrote, “Once he won, Spagnuolo then took deliberate steps to conceal his unlawful use of nonpublic information by attempting to obscure the source and ownership of his unlawful proceeds.”

Google and Polymarket Respond to Investigation

Google confirmed that the employee had been placed on leave while the investigation continues.

“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,” a Google spokesperson said.

Polymarket also said it cooperated with federal investigators and regulators during the inquiry.

“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. “We are committed to maintaining accurate, fair, and transparent markets as well as enforcing our rules and working with our regulators and law enforcement.”

Another Polymarket spokesperson added, “Blockchain trading is transparent, traceable, and bad actors leave footprints.”

The case marks the second major insider trading prosecution tied to Polymarket in recent months. Earlier this year, prosecutors charged U.S. Army Special Forces member Gannon Ken Van Dyke with using classified information to place bets related to an operation targeting Venezuelan President Nicolás Maduro. Prosecutors alleged that Van Dyke earned more than $400,000 through those trades.