Federal prosecutors have charged a Google software engineer with using confidential internal company data to trade on a cryptocurrency prediction market. The sealed complaint was filed in the United States District Court for the Southern District of New York under magistrate docket number 26 MAG 2020 and names Michele Spagnuolo, a/k/a “AlphaRaccoon,” as the defendant (p. 1). It charges three counts: commodities fraud under 7 U.S.C. §§ 9(1) and 13(a)(5) and 17 C.F.R. § 180.1 (Count One, p. 1), wire fraud under 18 U.S.C. § 1343 (Count Two, p. 2), and money laundering under 18 U.S.C. § 1956 (Count Three, p. 2). The supporting affidavit was sworn by FBI Special Agent Brandon Racz before U.S. Magistrate Judge Sarah Netburn (pp. 1, 7).
What confidential Google data did Spagnuolo allegedly misappropriate?
The complaint centers on Google’s “Year in Search” results, which it describes as commercially valuable proprietary data. Spagnuolo, identified as “a staff software engineer at Google” since approximately 2014, allegedly “misappropriated confidential and valuable nonpublic information from his employer” and used it to place “Google-related bets on Polymarket, a prediction market platform” (pp. 2, 3).
The complaint emphasizes the data’s sensitivity, explaining that “because the commercial impact of the campaign depends on the element of surprise and the coordinated nature of its public reveal, the top-trending search information is valuable” (p. 3). Access within Google was reportedly limited, and the internal tool through which Spagnuolo viewed the data “bore a banner that stated, in part, ‘Google Confidential’ in red text” (p. 3).
How did the alleged Polymarket scheme work?
The complaint alleges a temporal correlation between Spagnuolo’s access to Google’s internal data and his wagers. Polymarket, a Manhattan prediction marketplace operated by Blockratize, Inc., began offering binary event contracts in October 2025 on who would rank among the most searched people on Google for 2025 (pp. 3-4). After accessing the data on or about October 15, 2025, the AlphaRaccoon account began betting the following day (p. 6).
After the internal leader changed, the complaint states that “by this time, Google’s internal Year in Search data reflected that ‘d4vd’ had replaced Kendrick Lamar as the ‘#1 searched person on Google’ for 2025” (p. 6). Investigators describe wagers structured to exploit that foreknowledge, including approximately $937,688 against Bianca Censori and $509,149 against Donald Trump as the top searched person (p. 6). In total, the account “risked approximately $2,754,092 on approximately 25 Google Year in Search 2025 outcomes that the market treated as unlikely,” and after Google’s December 4, 2025 release it “profited approximately $1.2 million” (pp. 4, 6). A footnote adds that the results page briefly “went live between approximately five and six hours earlier than anticipated” before being taken offline (p. 4, n.1).
How did investigators link the AlphaRaccoon account to Spagnuolo?
Investigators attributed the account to Spagnuolo through cryptocurrency tracing. The complaint describes funds flowing through a swapping service to a payment processor, where transactions “were received by account in the name of ‘Michele Spagnuolo,'” an account opened using an Italian Government identification card (p. 5). The money-laundering count rests on subsequent concealment, including swaps through a decentralized service and a transfer to a service that “adds privacy protection to cryptocurrency transactions through removal of wallet addresses from the blockchain” (p. 7).
The complaint also notes a reputational dimension to the concealment, observing that “after Discord and X communities discussed AlphaRaccoon, and speculated its user was a Google insider, the ‘AlphaRaccoon’ username was removed from the Polymarket account” (p. 7).
Why is this charged as commodities fraud rather than securities fraud?
The lead count rests on the Commodity Exchange Act because the trades are charged in connection with a swap rather than a security. Count One alleges that Spagnuolo used a “manipulative and deceptive device” in contravention of 17 C.F.R. § 180.1, the CFTC’s anti-fraud rule, “knowing that he had obtained material nonpublic information in breach of a duty” (p. 1). That misappropriation theory ties the three counts together, and each count also cites 18 U.S.C. § 3238, the venue provision for offenses committed outside the jurisdiction of any single district (pp. 1-2).
What penalties do the charges carry?
According to the U.S. Attorney’s Office, the Commodity Exchange Act count carries a maximum of 10 years in prison, and the wire fraud and money laundering counts each carry a maximum of 20 years (Press Release). The office, which announced the charges through U.S. Attorney Jay Clayton and FBI Assistant Director in Charge James C. Barnacle, Jr., states the matter is being handled by its Securities and Commodities Fraud Task Force (Press Release). Spagnuolo, described as a 36-year-old Italian citizen residing in Switzerland, was presented before Magistrate Judge Netburn (Press Release).
Anyone facing scrutiny over prediction market trading, digital asset transfers, or the handling of an employer’s confidential information has reason to seek counsel early. To discuss a specific situation with a Chicago attorney, you can request a consultation. For a deeper reference on these issues, see our financial markets resource center.
Key Authorities
- Commodity Exchange Act, 7 U.S.C. §§ 9(1), 13(a)(5)
- CFTC Rule 180.1, 17 C.F.R. § 180.1
- Wire fraud, 18 U.S.C. § 1343
- Money laundering, 18 U.S.C. § 1956
- Extraterritorial venue, 18 U.S.C. § 3238
- Aiding and abetting / principal liability, 18 U.S.C. § 2
Frequently Asked Questions
What is Michele Spagnuolo charged with?
He is charged with three federal counts: commodities fraud, wire fraud, and money laundering (pp. 1-2). The complaint alleges he used confidential Google Year in Search data to trade on the prediction market Polymarket and profited approximately $1.2 million (pp. 2, 6).
What is Polymarket, and how do its markets work?
Polymarket is a Manhattan prediction marketplace operated by Blockratize, Inc. that offers binary event contracts (pp. 3-4). Each market is a Yes/No question; at resolution the correct side pays $1.00 and the other pays $0.00, with shares priced in the stablecoin USDC.e (p. 4).
Why was Spagnuolo charged under commodities law rather than the securities laws?
Because the trades are charged in connection with a swap, not a security, so they fall under the Commodity Exchange Act and CFTC Rule 180.1 rather than the securities laws (p. 1). The Government alleges a misappropriation theory: using an employer’s confidential information in breach of a duty to trade (p. 1).
How did investigators connect the AlphaRaccoon account to Spagnuolo?
Through cryptocurrency tracing that followed funds to a payment processor account opened in the name Michele Spagnuolo using an Italian Government identification card (p. 5). The complaint treats the wallet and account flows as evidence that the same person controlled them (pp. 4-5).
What maximum penalties do the charges carry?
The Commodity Exchange Act count carries up to 10 years in prison, and the wire fraud and money laundering counts each carry up to 20 years (Press Release). These maximums are set by Congress, and any sentence would be determined by the court (Press Release).