Key Highlights

  • Federal prosecutors in the Southern District of New York charged Michele Spagnuolo, a Google staff information security engineer, with commodities fraud, wire fraud, and money laundering.

  • Spagnuolo allegedly accessed Google's confidential Year in Search internal data tool to place $2.7 million across 25 Polymarket outcomes, netting approximately $1.2 million in profit.

  • The case is the second Polymarket insider trading prosecution of 2026, following April charges against a U.S. Army sergeant who allegedly used classified military intelligence to profit more than $400,000 on a separate prediction contract.

The U.S. Department of Justice charged Michele Spagnuolo, 36, an Italian citizen residing in Switzerland, with commodities fraud, wire fraud, and money laundering on May 27, 2026. According to the criminal complaint filed in the SDNY, Spagnuolo was a staff information security engineer at Google who had access to an internal tool giving him visibility into nonpublic Year in Search data, including which terms and people were trending highest on the platform before the results were publicly released.

Prosecutors allege Spagnuolo used that access to place $2.7 million in bets across 25 separate Polymarket prediction markets, focusing on outcomes tied directly to Google search rankings. A key trade involved correctly wagering that singer d4vd would be Google's most-searched person of 2025, a bet placed while he allegedly had access to the nonpublic data confirming the result. He operated under the Polymarket account name "AlphaRaccoon." Independent observers on the platform had flagged the account's unusual accuracy in December 2025, months before prosecutors acted. Total net profit from the scheme was approximately $1.2 million.

Spagnuolo appeared before a federal magistrate judge on May 27 and did not enter a plea. He was released on a $2.25 million bond. The charges carry significant potential penalties: commodities fraud and wire fraud each carry maximum sentences of 20 years, while money laundering charges can carry up to 20 years as well. Google has not commented on whether Spagnuolo remains employed at the company.

The case marks the second time in 2026 that Polymarket has appeared at the center of a federal insider trading prosecution. In April, a then-active U.S. Army Special Forces master sergeant named Gannon Ken Van Dyke was charged with using classified military intelligence to profit more than $400,000 on a Polymarket contract related to a U.S. operation targeting Venezuelan President Nicolas Maduro. Together, the two cases have drawn federal scrutiny to whether prediction market platforms can reliably detect and deter users with access to nonpublic information.