TLDR
- Google software engineer Michele Spagnuolo faces federal charges for allegedly using internal company data to bet on Polymarket
- He allegedly ran the account “AlphaRaccoon,” placing $2.7 million in bets and profiting $1.2 million
- Spagnuolo used an internal Google tool to track trending searches, then bet on those outcomes
- He faces charges of commodities fraud, wire fraud, and money laundering, with a maximum 50-year sentence
- The CFTC also filed a civil complaint seeking penalties, disgorgement, and trading bans
Federal prosecutors say Michele Spagnuolo accessed Google’s confidential search data and placed bets on prediction markets using that information.
“A Google employee allegedly used confidential information to make more than $1.2 million through insider trading on a prediction market,” said U.S. Attorney Jay Clayton. “Corporate insiders who misuse confidential information to trade for personal gain will be prosecuted.”…
— US Attorney SDNY (@SDNYnews) May 27, 2026
The Justice Department unsealed charges on May 28 against Spagnuolo, a Google software engineer based in the Southern District of New York. He is accused of using non-public internal data to place 25 bets on Polymarket, the crypto-based prediction market platform.
Spagnuolo allegedly used an internal Google tool to monitor who the most-searched people were in 2025. He then bet on those same individuals appearing on Google’s year-end “most searched” list.
Prosecutors say he operated under the Polymarket username “AlphaRaccoon.” The account transferred around $3.8 million in USDC to Polymarket and ultimately profited approximately $1.2 million.
How the Alleged Scheme Worked
One example cited in the complaint involved rapper D4vd, who was recently charged with murder. Spagnuolo allegedly accessed Google’s internal trending data showing D4vd rising in searches, then placed a bet through AlphaRaccoon on him appearing in the top searched list just hours later.
“Unlike the counterparties to his trades, Spagnuolo knew the outcome of these wagers before the trading public did,” the complaint stated.
After winning bets, Spagnuolo allegedly moved 5 million USDC from his Polymarket account to an external wallet. The funds were then routed through a crypto swapping service and a privacy tool designed to obscure blockchain transactions.
Some of those funds reportedly ended up at a payment processor in Italy, linked to an account opened using Spagnuolo’s government ID.
Attempts to Hide the Trail
Communities on Discord and X began speculating in December that AlphaRaccoon was a Google insider. Shortly after, the username was reportedly changed to a wallet address.
The Justice Department charged Spagnuolo with commodities fraud, wire fraud, and money laundering. He faces a maximum sentence of 50 years in prison.
The Commodity Futures Trading Commission also filed a civil complaint the same day, seeking restitution, disgorgement, civil penalties, and permanent trading and registration bans.
CFTC enforcement director David Miller said the division is “a cop on the beat in policing the illegal use of inside information in prediction markets.”
Google confirmed it placed Spagnuolo on leave. A company spokesperson said using confidential data to place bets is “a serious breach of our policies,” though the internal tool he used was available to all employees.
This is the second major Polymarket insider trading arrest. In April, a US Army soldier was charged with using classified information to bet on the capture of former Venezuelan president Nicolás Maduro.
Congress launched a probe into Polymarket and rival platform Kalshi last Friday, raising concerns that government officials may be using insider knowledge to profit on prediction markets.
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