TLDR
- Michele Spagnuolo, a software engineer at Google, is facing federal criminal charges for allegedly exploiting internal company information to wager on Polymarket
- Prosecutors allege he controlled the “AlphaRaccoon” account, wagering $2.7 million and earning $1.2 million in profits
- The engineer allegedly leveraged a Google internal system to monitor search trends, then placed bets based on that privileged data
- Criminal charges include commodities fraud, wire fraud, and money laundering, carrying up to 50 years in prison
- The CFTC simultaneously filed civil charges requesting financial penalties, profit forfeiture, and permanent market bans
Federal authorities allege that Michele Spagnuolo leveraged confidential Google search analytics to gain an unfair advantage in prediction market betting.
On May 28, the Department of Justice revealed criminal charges against Spagnuolo, a Google software engineer working within the Southern District of New York. Authorities accuse him of exploiting proprietary internal information to execute 25 wagers on Polymarket, the cryptocurrency-powered prediction trading platform.
According to allegations, Spagnuolo accessed a Google internal application that tracked the most-searched individuals throughout 2025. He subsequently placed bets predicting these same people would appear on Google’s annual “most searched” rankings.
Prosecutors claim he managed the Polymarket account operating as “AlphaRaccoon.” Records show this account moved approximately $3.8 million in USDC to Polymarket and generated roughly $1.2 million in net gains.
Details of the Alleged Trading Strategy
The criminal complaint highlights one instance involving rapper D4vd, who faced recent murder charges. Spagnuolo allegedly consulted Google’s proprietary trending analytics revealing D4vd’s surge in search volume, then wagered via AlphaRaccoon that he would rank among top searches mere hours afterward.
“Unlike the counterparties to his trades, Spagnuolo knew the outcome of these wagers before the trading public did,” the complaint stated.
Following successful wagers, Spagnuolo allegedly transferred 5 million USDC from his Polymarket account into an external cryptocurrency wallet. These funds were subsequently channeled through cryptocurrency exchange services and privacy-enhancing tools intended to mask blockchain transaction histories.
Investigators traced portions of these funds to an Italian payment processor, connected to an account established with Spagnuolo’s official identification documents.
Efforts to Conceal Activity
Online communities on Discord and X started suspecting in December that AlphaRaccoon had insider connections to Google. Shortly thereafter, the account username was allegedly switched to a cryptocurrency wallet address.
The Justice Department has charged Spagnuolo with commodities fraud, wire fraud, and money laundering offenses. The combined maximum prison term totals 50 years.
Simultaneously, the Commodity Futures Trading Commission launched a civil lawsuit seeking monetary restitution, profit disgorgement, civil monetary penalties, and lifetime prohibitions from trading and market registration.
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 has confirmed placing Spagnuolo on administrative leave. A company representative stated that exploiting confidential information for betting purposes constitutes “a serious breach of our policies,” while acknowledging the internal analytics tool was accessible to the entire employee base.
This marks the second significant insider trading prosecution involving Polymarket. Previously in April, authorities charged a US Army soldier with exploiting classified military intelligence to bet on the apprehension of former Venezuelan president Nicolás Maduro.
Congressional investigators initiated an inquiry into Polymarket and competing platform Kalshi last Friday, expressing concerns that government employees might be leveraging privileged information for financial gain on prediction markets.
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