Federal prosecutors in Manhattan have unsealed a criminal complaint charging a veteran Google software engineer with insider trading.
The employee allegedly misappropriated confidential, unreleased user search data to secure over $1.2 million in illicit profits on the decentralized prediction marketplace Polymarket.
The defendant, 36-year-old Michele Spagnuolo, is an Italian citizen residing in Switzerland who has worked as an information security engineer at Google since 2014.
Following his arrest on Wednesday, Michele appeared before a U.S. Magistrate Judge in the Southern District of New York and was released on a $2.25 million bond.
The “AlphaRaccoon” Scheme: Monopolizing Google “Year in Search”
According to the Department of Justice, Michele operated under the online pseudonym “AlphaRaccoon.”
Utilizing his elevated corporate access, he routinely extracted real-time, non-public statistics from an internal tool displaying upcoming metrics for Google’s highly anticipated 2025 “Year in Search” results.
Despite the software explicitly displaying “Google Confidential” warning banners, Michele allegedly leveraged this data to manipulate high-stakes wagers.
Between October 15 and December 4, 2025, Michele risked approximately $2.75 million on niche “yes” or “no” contracts tracking trending individuals.
Court documents reveal that he initially wagered heavily on rapper Kendrick Lamar topping the annual search list.
However, as Google’s internal trackers evolved, Michele pivoted his capital to alt-pop musician D4vd—who was facing an unexpected, high-profile criminal charge—after seeing him eclipse Lamar in internal queries.
Because the broader public placed a “near-zero probability” on D4vd topping the charts, Michele secured massive payouts once Google officially publicized the results on December 4.
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Corporate Crackdown on Emerging Prediction Markets
Jay Clayton, U.S. Attorney for the Southern District of New York, stated that the charges reinforce the message that corporate insiders cannot use confidential business information to profit in alternative markets.
Michele now faces federal counts of wire fraud, money laundering, and violating the Commodity Exchange Act, carrying cumulative maximum prison sentences of up to 20 years.
Google confirmed it has placed Michele on administrative leave, noting that while the exploited marketing tool was technically accessible to staff, using proprietary data for betting constitutes a severe policy breach.
Polymarket closely cooperated with the FBI, noting that the traceable, public nature of blockchain transactions leaves clear footprints that expose bad actors.
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About the Author
Sahiba Sharma
Contributing Writer