A federal case tied to Google and Polymarket has drawn attention because it combines alleged misuse of internal corporate information with a fast-growing prediction market. Prosecutors say the case centers on trades that turned non-public Google data into more than $1.2 million in profit.
The U.S. Department of Justice identified the defendant as Michele Spagnuolo, a 36-year-old Italian citizen living in Switzerland. He was arrested in New York and later appeared before a federal magistrate judge, where he did not enter a plea.
Alleged use of confidential Google information
According to the indictment, Spagnuolo had access to Google’s internal data systems and to software tools that exposed confidential, non-public information. Prosecutors said one of those tools displayed a banner marked “Google Confidential” in red text.
Authorities also said Spagnuolo acknowledged that he understood Google’s confidentiality and ethics policies. They allege he then used that access to place wagers that only became valuable after the relevant information was made public.
The government says the trades were made through Polymarket under the pseudonym “AlphaRaccoon.” That account was reportedly created in May 2024.
High-volume betting tied to search data
Prosecutors said the account placed about $2.75 million in bets on markets connected to internal Google information between 15 October 2025 and 4 December 2025. After the related Google results were published, the account allegedly produced a profit of about $1.2 million.
One of the wagers cited in the complaint involved a prediction that the singer D4vd would be the most searched person on Google in 2025. The account was also said to have correctly predicted several other search-related contracts, including whether Zohran Mamdani would enter the top five most-searched names and whether Squid Game would be the most searched TV show.
Google published its Year in Search 2025 results around 4 December 2025, and prosecutors say the AlphaRaccoon bets paid off after that disclosure.
Charges that could bring decades in prison
Spagnuolo has been charged under the Commodity Exchange Act and also faces wire fraud and money laundering allegations. Taken together, those counts carry a maximum sentence of 50 years in prison.
The Commodity Futures Trading Commission has also filed a civil case, accusing him of insider trading. The criminal and civil actions now place the matter under two separate legal tracks.
Jay Clayton, the U.S. Attorney for the case, said it reinforces a long-standing rule that corporate insiders cannot use confidential business information to make money in the markets. His comments framed the prosecution as part of a broader enforcement effort, not only a dispute involving a tech employee.
Google and Polymarket respond
Google said the employee accessed marketing materials through tools available to all staff members. The company added that using confidential information for betting was a serious violation of its policy and said Spagnuolo has been placed on administrative leave while the company considers further action.
His LinkedIn profile reportedly described him as part of a team building an “inventory of AI Agents across Alphabet/Google.” That detail places him within an area that intersects with internal company information.
Polymarket, meanwhile, said it remains committed to maintaining markets that are accurate, fair, and transparent. The platform also said it will enforce its rules while cooperating with regulators and law enforcement.
The case has also revived concern about the misuse of confidential information in prediction markets more broadly. Earlier this year, the White House warned staff not to use insider information to bet on platforms of that kind, and some Polymarket users had already flagged the AlphaRaccoon account in December over trades they found suspicious.