A Google software engineer has been charged by U.S. prosecutors after allegedly using confidential company information to win more than $1.2 million on the prediction market platform Polymarket.
Federal prosecutors charged Michele Spagnuolo, a Google employee, with fraud after he allegedly used internal Google information to place bets tied to the company’s “Year in Search 2025” results. The U.S. Attorney’s Office for the Southern District of New York said Spagnuolo, also known as “AlphaRaccoon,” was charged with commodities fraud, wire fraud, and money laundering.
Prosecutors say confidential Google data was used
The case centers on whether Spagnuolo used nonpublic Google search information before the public release of Google’s annual search-trends list.
The Verge reported that prosecutors allege Spagnuolo knew the outcome of the wagers before the trading public because he had accessed Google’s confidential internal data. The Justice Department said Spagnuolo had access to Google’s internal data systems, including a software tool that displayed a “Google Confidential” banner.
Federal prosecutors said that from around October 15, 2025, to December 4, 2025, Spagnuolo used the AlphaRaccoon account to risk approximately $2,754,092 on markets tied to Google’s internal information. After Google publicly announced the information and the markets resolved, the account allegedly made about $1.2 million in profits.
Bets were tied to Google’s Year in Search
The alleged trades involved Google’s annual Year in Search list, which highlights search trends from the year.
BBC reported that Spagnuolo correctly bet that singer D4vd would become the No. 1 searched person on Google in 2025, even though Polymarket had assigned that outcome a near-zero probability, according to the complaint. He allegedly bet that Pope Leo XIV and Kendrick Lamar would not appear on Google’s Year in Search 2025 lists.
The case is notable because Google’s Year in Search rankings are not simply based on total search volume. The rankings are based on search terms with the “highest increase in traffic,” not the highest overall number of searches, between January 1, 2025, and November 25, 2025.
Charges could carry decades in prison
The Justice Department said Spagnuolo is a 36-year-old Italian citizen residing in Switzerland and a software engineer at Google. He was presented before U.S. Magistrate Judge Sarah Netburn in the Southern District of New York after the complaint was unsealed.
The Justice Department said the commodities fraud charge carries a maximum sentence of 10 years in prison, while wire fraud and money laundering each carry a maximum sentence of 20 years. The agency also stressed that the maximum sentences are set by Congress and that any sentence would be determined by a judge.
Google placed the employee on leave
Google has said it is cooperating with law enforcement.
Google spokesperson Jaclyn Vazquez shared that the employee accessed marketing material using a tool available to all employees, but using confidential information to place bets is a serious breach of company policies. She also said Google placed the employee on leave and would take appropriate action.
The Justice Department quoted U.S. Attorney Jay Clayton as saying corporate insiders cannot use confidential business information to profit in markets. Clayton said Spagnuolo allegedly violated duties owed to his employer and used Google’s confidential business information to make more than $1.2 million in trading profits on Polymarket.
Polymarket says its systems flagged the activity
The case also puts more attention on prediction markets, where users trade contracts tied to future events.
Polymarket said its “market integrity infrastructure” flagged Spagnuolo’s activity and that blockchain trading is transparent and traceable. Polymarket also said it is working with law enforcement on the investigation.
Several states have moved to regulate prediction platforms such as Polymarket and Kalshi because of insider trading concerns, while the Commodity Futures Trading Commission has claimed exclusive authority over prediction markets.
Prediction markets face a trust test
The case shows why prediction markets are facing growing scrutiny as they expand beyond politics and sports into corporate, cultural, and technology-linked outcomes.
For Google, the case is about internal confidentiality and employee misuse of company information. For Polymarket, it raises questions about whether transparent blockchain records are enough to protect market integrity when traders may have access to information that the public does not.
For regulators, the case may become another example of how old financial rules are being tested by new platforms. Prediction markets depend on public confidence that outcomes are fairly priced. If insiders can use confidential company data to gain an edge, the market becomes less about forecasting and more about access.
