Michele Spagnuolo, 36, is charged with commodities fraud, wire fraud, and money laundering.

A software engineer at Google unlawfully used confidential company information to make a series of bets that won him about $1.2 million on the online prediction market Polymarket, the Justice Department alleged in a criminal complaint Wednesday. Software engineer Michele Spagnuolo used internal data about search activity to place roughly $2.7 million in bets on which public figures would be announced as among the most searched for in 2025, according to the federal complaint. The 36-year-old Italian citizen used an account called AlphaRaccoon to place bets late last year on whether and how figures including singer D4vd and Pope Leo XIV would appear in rankings released by Google in its Year in Search report last December, according to the complaint and a Justice Department news release. “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,” the complaint alleged. Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Spagnuolo, a resident of Switzerland, appeared before a US magistrate judge in New York on Wednesday, the Justice Department said. He was charged with commodities fraud, wire fraud, and money laundering. The case appears to be the second time the Justice Department has charged a prediction market user with a form of insider trading. In April, a Special Forces soldier involved in the capture of Venezuelan president Nicolás Maduro was charged with using classified information about the operation to win roughly $400,000 through a series of bets on Polymarket. Polymarket and its rival prediction market platform Kalshi have soared in popularity over the past two years as the start-ups have won over users willing to bet money against each other on stock trading-style markets for events including federal elections, government actions, sports, and celebrity marriages. The platforms have also attracted scrutiny from Congress over the incentives they might create for people in business or public office to use their influence or inside information to tilt the odds of prediction market wagers. Senators voted last month to unanimously to ban themselves from participating in prediction markets. US Attorney Jay Clayton said in a statement released Wednesday that the charges against Spagnuolo showed that cheating on prediction markets would not be tolerated. “Today’s charges reinforce a decades-old message: corporate insiders cannot use confidential business information to turn a profit in our markets,” he said. “As alleged, Spagnuolo violated the duties he owed to his employer and used Google’s confidential business information to make more than $1.2 million in trading profits on Polymarket. Insider trading compromises the integrity of our markets, and the American people want this greed-driven conduct investigated and prosecuted.” Spagnuolo used an internal software tool with a banner that read “Google Confidential” in red text to access search data before the company publicly released its annual report on search trends, according to the complaint. Using his AlphaRaccoon account Spagnuolo placed bets on Google’s Year in Search data between October and December last year, according to the complaint. He removed the name from the account after his streak of successful wagers led other Polymarket users to speculate on Discord and X that the account belonged to a Google insider, the complaint said. Google spokesperson Jaclyn Vazquez said in a statement that the company was working with law enforcement. “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,” Vazquez said. Polymarket deputy chief legal officer Olivia Chalos said in a statement that the company worked closely with the US attorney’s office for the Southern District of New York and the Commodity Futures Trading Commission, the federal agency that regulates prediction markets. “We are committed to maintaining accurate, fair, and transparent markets as well as enforcing our rules and working with our regulators and law enforcement,” the statement said. Polymarket also posted a statement on its X account Wednesday that appeared to credit an internal team at the company with first identifying the allegedly fraudulent behavior. “Proud to announce Polymarket’s market integrity infrastructure flagged another trader who was arrested this morning in New York for insider trading,” it said. “With 2 out of 2 arrests in this industry resulting from our criminal referrals, Polymarket has emerged as the enforcement leader,” the statement said, apparently referring to the earlier charges against the Special Forces soldier.

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