NEW YORK — Federal prosecutors unsealed a criminal complaint on Tuesday charging a Google software engineer with insider trading, wire fraud, and money laundering, alleging he harvested confidential internal data about the company’s Year in Search campaign to place a series of winning bets on the prediction market platform Polymarket, netting more than $1.2 million in illicit profits.
The defendant, Michele Spagnuolo, 36, an Italian citizen residing in Switzerland who had worked at Google for more than 12 years, operated on Polymarket under the alias “AlphaRaccoon.” He was presented before U.S. Magistrate Judge Sarah Netburn in Manhattan federal court on Tuesday, according to reports from the U.S. Department of Justice.
“Today’s charges reinforce a decades-old message: corporate insiders cannot use confidential business information to turn a profit in our markets,” Jay Clayton, the United States Attorney for the Southern District of New York, said in a statement. “Insider trading compromises the integrity of our markets, and the American people want this greed-driven conduct investigated and prosecuted.”
According to the complaint, Spagnuolo accessed an internal Google software tool that bore a red-text “Google Confidential” banner, giving him nonpublic data tied to the company’s 2025 Year in Search campaign — an annual marketing release in which Google publicizes the most-searched celebrities and topics of the year. He allegedly used that data to inform a string of wagers on Polymarket between October 15 and December 4, 2025, risking a total of approximately $2.75 million across multiple markets. Once Google publicly released the Year in Search data and the markets resolved, Spagnuolo’s account collected roughly $1.2 million in profit.
Spagnuolo is charged with one count of violating the Commodity Exchange Act, which carries a maximum sentence of 10 years in prison; one count of wire fraud, carrying up to 20 years; and one count of money laundering, also carrying up to 20 years. Prosecutors described the conduct as a straightforward betrayal of employer trust dressed up in the anonymity of a blockchain betting platform.
“Michele Spagnuolo allegedly abused his elevated access to confidential trends to place bets with nonpublic information and receive more than one million dollars in unlawful profits,” said FBI Assistant Director in Charge James C. Barnacle, Jr. “The FBI remains dedicated to searching for fraudsters who betray their employer for personal financial gains.”
Google confirmed it was cooperating with law enforcement and placed Spagnuolo on leave pending further action. “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,” the company said in a statement. The company did not indicate whether the internal tool’s access would be restricted in the wake of the charges.
Polymarket, for its part, cast itself as a cooperative partner rather than a victim. “Blockchain trading is transparent, traceable, and bad actors leave footprints,” a company spokesperson said. The platform added that it had worked closely with the U.S. Attorney’s Office for the Southern District of New York and the Commodity Futures Trading Commission in building the case, calling itself the only prediction platform whose cooperation has to date produced insider trading charges in the United States.
The case arrives as prediction markets, long a niche corner of online finance, have moved into the mainstream. Platforms such as Polymarket, Kalshi, and others now handle hundreds of millions of dollars in open interest on elections, geopolitical events, sports outcomes, and corporate announcements. The transparency of blockchain ledgers — often cited by platforms as a selling point over conventional gambling — has also proved a double-edged sword: the same immutable record that reassures bettors about fair play made it straightforward for investigators to trace the AlphaRaccoon wallet’s activity back to its owner.
The DOJ’s handling of the case reflects a broader push by federal prosecutors to apply financial-markets enforcement logic to the prediction market sector. The rapid growth of prediction platforms has drawn scrutiny from both the CFTC and Congress, with critics arguing that the distinction between speculative wagering and regulated securities trading has become increasingly difficult to draw. Earlier this month, the Justice Department charged a U.S. Army soldier with separately using classified military intelligence to profit on Polymarket, netting roughly $400,000 on bets tied to the U.S. military operation to capture Venezuelan president Nicolás Maduro.
The Spagnuolo case, however, introduces a wrinkle the Army case did not: a big-technology-company employee exploiting a consumer-facing marketing initiative rather than classified government operations. The Year in Search campaign is designed for public consumption, but the underlying trend data that informs it sits behind access-controlled internal systems — systems that, as the complaint makes clear, explicitly warn users of their confidential nature. Prosecutors allege that Spagnuolo saw those warnings and proceeded anyway.
The case is being handled by the Office’s Securities and Commodities Fraud Task Force, with Assistant U.S. Attorneys Thomas Burnett, Ryan B. Finkel, and Allison Nichols leading the prosecution. The SDNY has in recent months pursued an aggressive series of securities and commodities fraud cases, including the sentencing of a former Doximity executive for insider trading and the guilty plea of the CEO of fintech startup Kalder on securities fraud charges.
It is unclear whether Spagnuolo has retained counsel. No arraignment date has been publicly announced as of Tuesday evening.
For Google, the episode raises uncomfortable questions about the perimeter of its internal data governance. The complaint states that Spagnuolo certified his understanding of the company’s confidentiality and ethics policies, and that the internal tool he used bore a prominent confidential label. The question for the company’s security and legal teams is how an individual employee could stake nearly $2.75 million in prediction market wagers tied to that data across roughly seven weeks without triggering any internal alert. The intersection of financial markets and confidential corporate data has grown considerably more fraught as blockchain-based platforms multiply and their settlement architecture increasingly mirrors that of regulated exchanges.
The complaint is available on the Justice Department’s website. The charges are allegations, and Spagnuolo is presumed innocent unless proven guilty in a court of law.
