A Google engineer has been charged by the DOJ for using internal search data to place a $2.7 million bet on Polymarket.
Michele Spagnuolo is accused of trading under the alias ‘AlphaRaccoon’, making $1.2 million based on Google’s Year-in-Search results. This marks the second federal criminal case associated with Polymarket.
Federal prosecutors in the Southern District of New York have charged the 36-year-old Google information-security engineer, who resides in Switzerland, with utilizing internal Google search-trend data to wager $2.7 million on Polymarket, resulting in a profit of $1.2 million from the prediction market’s 2025 Google Year-in-Search contracts.
The case, revealed on Tuesday, is the second federal criminal case related to trading on Polymarket and the first involving information misappropriated from a major Silicon Valley company. The details are quite specific. In late 2025, Polymarket operated a market regarding who would appear at the top of Google’s Year-in-Search list, an annual summary of the most-searched terms and individuals.
Prosecutors claim that Spagnuolo accessed non-public search-trend data using an internal Google tool and placed 25 distinct bets on the market via the account “AlphaRaccoon.” He wagered nearly $1 million that Kanye West’s wife, Bianca Censori, would not be at the top, over $600,000 that Pope Leo XIV would also not finish first, and made a significant bet on the artist D4vd at a near-zero probability set by Polymarket.
D4vd emerged victorious when Google announced the results on December 4, 2025, leading to a profit of $1.2 million from Spagnuolo’s AlphaRaccoon account. He later removed the AlphaRaccoon name from his Polymarket account and transferred his winnings from the linked cryptocurrency wallet.
The charges include commodities fraud, wire fraud, and money laundering. The Commodity Futures Trading Commission has filed a parallel civil case. The filing from the SDNY, supported by an FBI investigation, represents the most definitive public application of US securities-style insider trading law concerning a prediction-market transaction.
This legal argument is innovative since Polymarket’s event contracts are classified by the CFTC as derivatives rather than by the SEC as securities; traditionally, insider-trading liability has been more associated with the securities environment. Prosecutors have navigated this by utilizing the commodities-fraud statute, which covers manipulation across all CFTC-regulated markets.
The Spagnuolo case falls within a tightening regulatory landscape for Polymarket, which has been increasingly scrutinized over recent weeks. The US House Oversight Committee, led by James Comer, launched an investigation last Friday into the potential misuse of non-public information by Polymarket and Kalshi customers for trading.
On Tuesday, Spain prohibited both platforms altogether over gambling-licensing issues, while India officially blocked Polymarket on May 21. Earlier this year, a US soldier faced charges for employing insider information to bet on Venezuelan political outcomes, gaining approximately $400,000; until Tuesday, this was the only known public criminal case involving Polymarket.
With the Spagnuolo charges, there are now two cases, marking a significant escalation: a senior Silicon Valley engineer rather than just a soldier. The Polymarket aspect of the situation is one the company is handling internally. Polymarket founder Shayne Coplan publicly challenged the broader insider-trading context of the Comer investigation on Tuesday, asserting that the platform’s pricing mechanisms are resilient against a small number of informed traders.
Whether this position holds in light of the Spagnuolo prosecution remains an important question. Reportedly, the Year-in-Search market was small enough that a $2.7 million position could be spotted within the order book; however, Polymarket’s surveillance team has not clarified why this position was not flagged prior to the December 2025 announcement.
Spagnuolo was apprehended in Switzerland and is said to be cooperating with the extradition process. Google has not yet indicated whether it plans to pursue its own civil action against the former employee.
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A Google engineer has been charged by the DOJ for using internal search data to place a $2.7 million bet on Polymarket.
The Department of Justice has accused Google information-security engineer Michele Spagnuolo of using internal search trend data to earn $1.2 million on Polymarket’s Year-in-Search market.