TLDR
- Michele Spagnuolo, a software engineer at Google, has been federally charged with exploiting confidential company information for prediction market betting
- Prosecutors allege he controlled the “AlphaRaccoon” account, wagering $2.7 million and earning $1.2 million in profits
- The engineer allegedly accessed internal Google analytics tracking search trends to predict betting outcomes
- Federal charges include commodities fraud, wire fraud, and money laundering, carrying a potential 50-year prison term
- The CFTC simultaneously filed civil charges demanding financial penalties, asset 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 announced criminal charges against Spagnuolo, a Google software engineer operating within the Southern District of New York. Authorities claim he exploited privileged access to internal data while placing 25 separate wagers on Polymarket, a cryptocurrency-powered prediction platform.
According to prosecutors, Spagnuolo leveraged an internal Google analytics tool to identify which individuals were experiencing the highest search volume in 2025. He then allegedly wagered on these same people appearing on Google’s annual “most searched” rankings.
Federal investigators say he managed the Polymarket account “AlphaRaccoon,” which transferred approximately $3.8 million in USDC to the platform and netted roughly $1.2 million in profits.
How the Alleged Scheme Worked
The criminal complaint highlights a specific instance involving rapper D4vd, who recently faced murder charges. Spagnuolo allegedly consulted Google’s proprietary trending data revealing D4vd’s surge in search activity, then placed a wager through AlphaRaccoon on his appearance in the top searched list 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 to an external cryptocurrency wallet. These funds were subsequently channeled through crypto exchange services and privacy-enhancing tools intended to mask blockchain transaction trails.
Investigators report that portions of these funds eventually reached an Italian payment processor connected to an account established with Spagnuolo’s government-issued identification.
Attempts to Hide the Trail
Online communities on Discord and X started questioning whether AlphaRaccoon had insider connections to Google in December. Shortly thereafter, the account username was reportedly switched to a wallet address.
The Department of Justice has charged Spagnuolo with commodities fraud, wire fraud, and money laundering. If convicted on all counts, he faces up to 50 years behind bars.
The Commodity Futures Trading Commission filed parallel civil charges on the same date, pursuing financial restitution, profit disgorgement, civil monetary penalties, and lifetime bans 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 that Spagnuolo was placed on administrative leave. A company representative stated that leveraging confidential information for personal betting represents “a serious breach of our policies,” while noting that the analytics tool in question was accessible to the entire employee base.
This marks the second significant insider trading prosecution connected to Polymarket. In April, authorities charged a US Army soldier with utilizing classified military intelligence to bet on the apprehension of former Venezuelan president Nicolás Maduro.
Congress initiated an investigation into Polymarket and competing platform Kalshi last Friday, expressing alarm that government personnel might be exploiting insider knowledge for financial gain through prediction markets.
