A software engineer with more than a decade of experience at Google allegedly used internal information to pocket $1.2 million on the prediction market Polymarket.
Michele Spagnuolo, the Google engineer who went by the username “AlphaRaccoon” online, allegedly disregarded red text at the top of an internal tool that read “Google Confidential,” and accessed data about the most-searched celebrities to help inform several bets he made on Google’s 2025 Year in Search, a marketing campaign showing the top searches from last year, according to the complaint, which was filed by the U.S. Attorney’s Office for the Southern District of New York.
Spagnuolo, who worked at Google for 12 years, allegedly used a crypto wallet to put up $2.7 million of his own money across dozens of bets to net a nine-figure payday. Using the internal Google data as a reference, Spagnuolo, among other bets, wagered $937,688 that Bianca Censori, Kanye West’s wife, would not be the No. 1 person searched last year even as the average implied probability was about 85%.
He repeated the process several times, betting hundreds of thousands of dollars that well-known figures such as Pope Leo XIV and President Donald Trump would not be the top searched person, even when the probability was shown as high on Polymarket. He also bet on musical artist d4vd to be the top searched person of the year, even when the probability of that happening was near zero on the platform, according to the complaint.
An Italian citizen who lives in Switzerland, Spagnuolo is now charged in the U.S. with commodities fraud, wire fraud, and money laundering, according to a Justice Department press release. He was arrested in New York on Wednesday, ABC News reported. If found guilty, Spagnuolo could face a maximum of 50 years in prison, according to the Justice Department.
“Insider trading compromises the integrity of our markets, and the American people want this greed-driven conduct investigated and prosecuted,” said Jay Clayton, the U.S. attorney for the Southern District of New York, in a statement.
A spokesperson for Polymarket said in a statement to Fortune it “is the only prediction platform to date whose cooperation has led to insider trading charges in the United States.”
Although Polymarket was banned from the U.S. until late last year, the platform has emerged as one of the most popular places to place “event contracts,” financial derivatives that allow users to trade on real-world events. These bets can span from whether the U.S. will invade Iran to what the No. 2 Netflix show will be for the week.
At the same time, the Justice Department has recently cracked down on insider trading across several platforms, including Polymarket.
In April, the Justice Department charged an Army Special Forces Master Sergeant with using classified information about the U.S. operation to capture former Venezuelan president Nicolás Maduro to bet on Polymarket contracts to net more than $400,000.
These investigations have also previously extended to sports betting, which has also risen in popularity in recent years. In October, federal prosecutors unsealed an indictment that charged six defendants including former Charlotte Hornets player Terry Rozier with using internal injury and lineup information to make bets on NBA games over several years. All of the defendants were charged with conspiracy to commit wire fraud and conspiracy to commit money laundering.
As for the Google engineer case, a spokesperson for Google was working with law enforcement on the 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,” the spokesperson said. “We’ve placed the employee on leave and will take the appropriate action.”
