A Google engineer has been accused of misappropriating confidential company information to place Google-related trades on Polymarket, allegedly profiting about $1.2 million.

U.S. prosecutors filed a criminal complaint against Michele Spagnuolo, a software engineer at Google, charging him with fraud and money laundering, according to a filing unsealed Wednesday. 

The Commodity Futures Trading Commission also filed a parallel civil complaint against Spagnuolo, alleging insider trading in violation of the Commodity Exchange Act.

Between October and December 2025, Spagnuolo allegedly used an account known as "AlphaRaccoon" to place trades on Polymarket. According to the filings, he participated in at least 23 contracts tied to the platform's the "2025 Year in Search List," including markets such as "#1 Searched Person on Google this year" and "Top 5 Most Searched People on Google 2025."

The complaints alleged that Spagnuolo earned approximately $1.2 million in profits from Polymarket trades based on his access to inside information. 

"As alleged, Spagnuolo violated the duties he owed to his employer and used Google’s confidential business information to make more than $1.2 million in trading profits on Polymarket," U.S. Attorney Jay Clayton said in a press release. "Insider trading compromises the integrity of our markets, and the American people want this greed-driven conduct investigated and prosecuted."

CFTC Chair Michael Selig also said in a Wednesday statement that the complaint against the Google employee reflects the agency's "commitment to rooting out insider trading and promoting market integrity in prediction markets."

Potential penalties

Spagnuolo, a 36-year-old Italian citizen residing in Switzerland, faces charges of commodities fraud, wire fraud, and money laundering, which carry maximum prison sentences of 10 years, 20 years, and 20 years, respectively. The CFTC, meanwhile, is seeking civil monetary penalties, restitution and trading bans against Spagnuolo.

Spagnuolo was arrested in New York on Wednesday. According to ABC News, he did not enter a plea and was released on a $2.25 million bond.

A Google spokesperson told The Block that the company has placed Spagnuolo on leave and is cooperating with law enforcement in its investigation.

"The employee accessed our marketing material using a tool available to all employees, but using such confidential information to place bets is a serious breach of our policies. We've placed the employee on leave and will take the appropriate action," said the Google spokesperson.

Polymarket wrote in a post on X that its "market integrity infrastructure" flagged the trader.

"With 2 out of 2 arrests in this industry resulting from our criminal referrals, Polymarket has emerged as the enforcement leader. Blockchain trading is transparent, traceable, and bad actors leave footprints," Polymarket said.

The case against Spagnuolo follows another Polymarket-related insider trading case last month, where an active-duty U.S. soldier was accused of using confidential information to place bets ahead of the capture of former Venezuelan President Nicolás Maduro earlier this year.