DOJ charges Google staffer over Polymarket trades netting $1.2 million

A Google software program engineer has been charged with utilizing confidential firm info to make $1.2 million on Polymarket, within the second identified federal legal case linked to profitable trades on a prediction market web site.

Michele Spagnuolo, 36, an Italian citizen who lives in Switzerland, was arrested on Wednesday and charged with commodities fraud, wire fraud, cash laundering and different counts for allegedly putting bets on search developments primarily based on inside Google knowledge that tracked person searches.

“Not like the counterparties to his trades, Spagnuolo knew the end result of those wagers earlier than the buying and selling public did as a result of he had accessed Google’s confidential, commercially beneficial inside knowledge,” in line with the federal indictment, which authorities unsealed on Wednesday.

Prosecutors say Spagnuolo, working underneath the username AlphaRaccoon, positioned quite a few wagers on Google’s most-searched individual of 2025.

He wager almost $1 million that Kanye West’s spouse, Bianca Censori, wouldn’t be the most-Googled individual. He additionally wager greater than $600,000 that Pope Leo XIV wouldn’t take the highest spot, and he positioned one other wager that the rapper D4vd could be the No. 1 most-Googled particular person at a time when most Polymarket merchants “assigned near-zero chance” to the singer, who has been charged with homicide.

In all, in line with prosecutors, Spagnuolo wager $2.7 million on 25 separate outcomes within the Google search market, netting $1.2 million in revenue.

The charging paperwork say as soon as Spagnuolo transferred his winnings out of his cryptocurrency pockets, he eliminated the identify AlphaRaccoon from his Polymarket account.

The Commodity Futures Buying and selling Fee introduced a separate civil case towards Spagnuolo for allegedly violating commodities regulation.

Spagnuolo didn’t return a request for remark.

Google stated in a press release that the corporate cooperated within the federal authorities’s investigation into Spagnuolo, who has been positioned on depart.

“The worker accessed our advertising and marketing materials utilizing a device accessible to all staff, however utilizing such confidential info to position bets is a severe breach of our insurance policies,” stated Google spokesperson Jaclyn Vazquez.

Olivia Chalos, Polymarket’s chief authorized officer, stated in a press release that it “is the one prediction platform to this point whose cooperation has led to insider buying and selling expenses in the US,” including that, since customers on the location use crypto to commerce, it’s “clear, traceable and unhealthy actors depart footprints.”

Whereas the legal guidelines that apply to the prediction market business are much less strict than inventory market guidelines, what’s generally understood as “insider buying and selling,” or abusing personal confidential info for revenue, is unlawful underneath federal regulation.

However in prediction market boards on messaging websites akin to Discord, customers scour markets for big, uncommon trades and encourage others to comply with these bets with their very own wagers.

“AlphaRaccoon has alpha,” stated one person on Discord, utilizing the slang time period for any info that offers you an edge on prediction markets, pointing to Spagnuolo’s massive bets on the most-Googled individual of the 12 months earlier than Google had launched it. “Verify AlphaRaccoon account” stated one other person when requested how they need to wager in the marketplace.

Prediction markets websites akin to Kalshi and Polymarket have erupted in reputation in President Trump’s second time period, permitting anybody to wager on firm bulletins, geopolitical occasions, the end result of artwork auctions, elections and a seemingly limitless array of different subjects.

And as increasingly folks search income in each aspect of recent life, on-line sleuths have more and more recognized wagers that seem too good to be true, suspiciously assured long-shot bets which have netted prediction market merchants six- or seven-figure income.

In a single such occasion final month, a grasp sergeant with the U.S. Military Particular Forces was charged with utilizing labeled details about the seize of Venezuelan chief Nicolás Maduro to rake in additional than $400,000 on Polymarket.

The Spagnuolo indictment was unsealed a day after President Trump vowed on Fact Social to permit the prediction market business to “thrive” by asserting federal regulators’ “unique authority” over the controversial betting websites.

For months, administration officers have been combating state officers in court docket over who ought to police the prediction market business.

State officers say the platforms are primarily playing operations and needs to be topic to state playing guidelines, whereas the Trump administration views Polymarket and Kalshi as providing a kind of “futures contract” that falls underneath the umbrella of the Commodity Futures Buying and selling Fee, which has traditionally overseen markets on issues like grain futures, crude oil and valuable metals.

Polymarket’s hottest platform, which is predicated in Panama, is technically inaccessible to American customers. It was compelled to close down its U.S. operation in 2022 as a part of a settlement with federal regulators who stated the location was working with out a buying and selling trade license.

Two years later, the FBI raided the condo of the corporate’s founder, Shayne Coplan, as a part of a probe into whether or not Polymarket was violating that settlement.

The Trump administration dropped that investigation. Trump officers even invited Coplan to the White Home for a summit on cryptocurrency.

The president’s oldest son, Donald Trump Jr., is an advisor to Polymarket and Kalshi, and a companion in 1789 Capital, which is a significant investor in Polymarket.