A Google software engineer has been charged with fraud for allegedly using confidential company information to make over $1 million on a prediction market platform. Michele Spagnuolo, 36, is accused of exploiting his access to Google's internal data on user searches to place winning bets on Polymarket, a platform where users wager on future events.

The federal criminal complaint, unsealed in New York, alleges that Spagnuolo misappropriated valuable, nonpublic information from his employer to make a series of Google-related bets. Unlike other participants on Polymarket, Spagnuolo allegedly possessed foreknowledge of outcomes due to his access to Google's commercially sensitive data.

Prosecutors stated that Spagnuolo correctly bet that the singer D4vd would be the most searched person on Google in 2025. At the time of his wager, the prediction market assigned a near-zero probability to this outcome. Following Google's public announcement of its Year in Search 2025 results on December 4, 2025, Spagnuolo's account, operating under the pseudonym "AlphaRaccoon," reportedly profited $1.2 million from these bets.

Spagnuolo, an Italian citizen, was arrested in New York and appeared before a federal magistrate judge. He faces charges including commodities fraud, wire fraud, and money laundering. He was released on a $2.25 million bond, with $1 million secured and $50,000 cash required to be posted immediately.

Following his arrest, Spagnuolo allegedly took steps to conceal the source and ownership of his winnings, attempting to obscure the illicit nature of the funds. This action is cited as part of the evidence supporting the money laundering charges.

A spokesperson for Google acknowledged the situation, stating, "We're working with law enforcement on their investigation." The company confirmed that Spagnuolo accessed marketing material using a tool available to all employees, but emphasized that "using such confidential information to place bets is a serious breach of our policies." Google has placed the employee on leave and indicated that appropriate action will be taken.

This case marks the second recent action brought by the U.S. attorney's office for the Southern District of New York involving prediction markets. Previously, a U.S. special forces soldier was charged with making fraudulent bets on Polymarket concerning a raid in Venezuela.

Authorities are continuing their investigation into the full extent of Spagnuolo's alleged activities and the mechanisms used to conceal the profits. The case highlights potential vulnerabilities in how confidential data can be exploited, even within large technology firms.