Google Engineer Nets $1.2M on Polymarket, Faces Charges.

Google Engineer Nets $1.2M on Polymarket, Faces Charges.

He reportedly saw Google search trends early and used that information to place bets before it became public, earning about $1.2 million. Then federal prosecutors caught up with him. Michele Spagnuolo, a 36-year-old Google software engineer, is now charged with insider trading, wire fraud, and money laundering. The charges were unsealed in Manhattan federal court on May 27, 2026.

How the $1.2M Polymarket Scheme Worked

He allegedly used confidential company information to place a series of bets that earned him about $1.2 million on Polymarket. The software engineer operated under the username “AlphaRaccoon” and placed a string of bets tied to search trend outcomes. According to investigators, Spagnuolo accessed Google’s internal tool showing “D4vd” trending hours before the same outcome appeared on Polymarket.

Polymarket had priced the event at near-zero probability. When the outcome later materialised and the market settled, the trades produced roughly $1.2 million in profit. Spagnuolo, an Italian citizen who joined Google in 2014, allegedly relied on internal search data that tracked real-time user activity.

Google Engineer Polymarket: The Cover-Up Attempt

The money trail ultimately exposed him. “AlphaRaccoon” moved 5 million USDC from a Polymarket account into a private wallet. He then routed the funds through a swapping service and a privacy tool. Investigators later linked part of the funds to a payment processor account in Italy. That account had been opened using Michele Spagnuolo’s government ID.

However, blockchain transparency helped investigators trace the movement of funds and dismantle the concealment effort. As investigators noted, “Unlike the counterparties to his trades, Spagnuolo knew the outcome of these wagers before the bets were placed.”

Spagnuolo later appeared before a federal magistrate and secured release on a $2.25 million bond. His lawyer, Mike Ferrara, declined to comment on the charges.

What the Case Means for Prediction Markets

Google placed Spagnuolo on leave immediately after the allegations surfaced. In a statement, the company said the employee accessed internal marketing material using a tool available to all staff. It added that using confidential information to place bets violated company policy.

Meanwhile, Olivia Chalos, Polymarket’s chief legal officer, said the platform is the only prediction market to date whose cooperation has directly led to insider trading charges in the United States. She also noted that crypto-based trading makes activity traceable, which helps investigators identify bad actors.

The case follows another prosecution just over a month earlier. In that case, a US Army Special Forces master sergeant allegedly used classified operational information to profit on Polymarket. Together, these cases highlight a growing tension in prediction markets. They aggregate private information, yet they can also expose misuse of nonpublic data.

As a result, courts now face a central question: where to draw the line between informed trading and criminal fraud.