A software engineer at Google is facing serious federal criminal charges after prosecutors say he used confidential company data to place a series of winning bets on a prediction market platform, walking away with more than $1.2 million in illegal profits.
Michele Spagnulo, 36, an Italian citizen living in Switzerland, was charged in a federal complaint unsealed in New York City. The case is already drawing significant attention because it marks the second major criminal investigation tied to insider trading on Polymarket, one of the most widely used prediction market platforms in the world.
Who is Michele Spagnulo?
Spagnulo worked as a software engineer at Google and allegedly had access to internal tools that tracked user search activity. According to federal prosecutors, he used that privileged access to gain advance knowledge of outcomes that other traders on Polymarket had no way of knowing and then placed bets accordingly.
The charges against him include three counts: commodities fraud, wire fraud and money laundering. Each carries serious legal consequences, and together they paint a picture of what prosecutors describe as a calculated effort to exploit corporate access for personal financial gain.
The bet that triggered the investigation
Operating under the username AlphaRacoon, Spagnulo allegedly placed bets between October and December of last year, with one wager in particular drawing the attention of federal investigators. He bet that D4vd, a singer who had become embroiled in public controversy, would be named Google’s most searched person of the year in 2025.
At the time the bet was placed, the prediction market had assigned that outcome a probability close to zero meaning the wider trading public saw it as a near impossible result. Prosecutors say Spagnulo knew otherwise because he had already reviewed internal Google search data that pointed to exactly that outcome.
After collecting his winnings, Spagnulo allegedly worked to conceal where the money had come from, obscuring the source and ownership of the funds in what prosecutors characterize as an effort to launder the proceeds of the scheme.
Google confirms cooperation with investigators
Google confirmed that Spagnulo had been placed on leave following the allegations. A company representative acknowledged that the internal tool he used was technically available to all employees, but made clear that using any confidential data from such tools to place bets constitutes a serious violation of company policy.
Polymarket also responded to the case, noting that it is the only prediction platform whose cooperation with law enforcement has resulted in insider trading charges being filed in the United States. The company framed its involvement as part of a broader commitment to keeping its markets fair and transparent.
A growing pattern on prediction platforms
The Spagnulo case is not the first time Polymarket has found itself at the center of a federal investigation. In April, authorities charged Gannon Ken Van Dyke, a U.S. Special Forces soldier, with using classified military intelligence to place bets on the platform related to a raid involving Venezuelan President Nicolás Maduro. Van Dyke has pleaded not guilty.
Together, the two cases signal that federal prosecutors are paying close attention to prediction markets as a potential avenue for insider trading an area that until recently had attracted relatively little regulatory scrutiny.
What prosecutors are saying
Jay Clayton, the U.S. attorney for the Southern District of New York, was direct in his condemnation of the alleged conduct. He characterized the behavior as greed driven and emphasized that corporate insiders have never been permitted to use confidential business information to generate profits in any market and that prediction platforms are no exception.
What comes next
As the legal proceedings move forward, the outcome of the Spagnulo case could have meaningful implications for how prediction markets are regulated and monitored going forward. Prosecutors and platform operators alike appear to be signaling that the era of treating these platforms as a gray area for insider activity is over. For the broader financial community, the message is becoming harder to ignore.
