Google employee charged with $1.2m Polymarket fraud over insider search data
The US Army soldier previously charged in a separate Polymarket case highlights growing regulatory tensions over prediction markets, with the CFTC asserting exclusive authority against state-level bans.
Federal prosecutors have charged Google employee Michele Spagnuolo with commodities fraud, wire fraud, and money laundering, alleging he used confidential internal data to secure $1.2 million in profits on the prediction market platform Polymarket. The unsealed complaint states that Spagnuolo accessed Google’s commercially valuable internal data regarding the company’s 2025 ‘Year in Search’ trends before the results were made public.
Spagnuolo, who placed bets under the username AlphaRacoon, allegedly exploited the specific methodology Google uses to calculate its annual rankings. Rather than relying on total search volume, Google’s ‘Year in Search’ metrics are determined by the highest increase in traffic between 1 January and 25 November. Prosecutors allege Spagnuolo knew the outcomes of his wagers before the trading public because he had access to this non-public information.
Specific wagers included correctly predicting that singer D4vd would be the number one searched person on Google in 2025, despite Polymarket assigning a near-zero probability to the outcome. He also placed bets against Pope Leo XIV and Kendrick Lamar appearing on the lists. The complaint notes that after winning, Spagnuolo took deliberate steps to conceal the source and ownership of his proceeds.
The case has drawn significant attention amid a broader debate over the regulation of prediction markets. Several US states have attempted to restrict platforms like Polymarket and Kalshi due to insider trading concerns, but the Commodity Futures Trading Commission (CFTC) and President Donald Trump have opposed these measures. The CFTC maintains it holds exclusive authority over prediction markets, a stance reinforced by recent legal actions such as the charging of US Army soldier Gannon Ken Van Dyke for a separate Polymarket bet.
Google has placed Spagnuolo on leave pending an investigation. Spokesperson Jaclyn Vazquez confirmed that the employee accessed marketing material using a tool available to all staff but stated that using such confidential information for betting constituted a serious policy breach. Polymarket said its market integrity infrastructure flagged Spagnuolo’s activity and that it is cooperating with law enforcement. Spagnuolo was arrested in New York and released on a $2.25 million bond.
