Federal Authorities Uncover Seven-Figure Scheme, Alleging Tech Insider Manipulated Crypto Prediction Markets for Personal Gain

Table of Contents The U.S. Department of Justice has charged Michele Spagnuolo, a Google software engineer, with commodities fraud, wire fraud, and money laundering. Prosecutors allege he used confidential company data to place bets on Polymarket, a prediction market platform. Operating under the alias “AlphaRaccoon,” Spagnuolo allegedly generated over $1.2 million in profits between October and December 2025, risking approximately $2.75 million in total wagers tied to nonpublic Google information. Spagnuolo, 36, is an Italian citizen currently residing in Switzerland. He held a software engineering role at Google that granted him access to internal data systems. One tool he allegedly used displayed a “Google Confidential” banner in red text. He had also signed confidentiality and ethics agreements with the company. Prosecutors say he created his Polymarket account in May 2024 under the name “AlphaRaccoon.” He then began accessing internal Google data before placing trades on the platform. The bets were reportedly tied directly to nonpublic information he accessed through his role. DOJ Charges Google Engineer Over $1.2M Polymarket Insider Trading Profits The U.S. Department of Justice charged Google software engineer Michele Spagnuolo, known as “AlphaRaccoon” on Polymarket, with commodities fraud, wire fraud, and money laundering. Prosecutors allege he… pic.twitter.com/rjLF08VDh5 — Wu Blockchain (@WuBlockchain) May 31, 2026 The alleged trading activity ran from October 15 to December 4, 2025. Shortly after Google publicly announced the relevant information, the markets resolved in his favor. His account then collected profits exceeding $1.2 million from those resolved bets. U.S. Attorney Jay Clayton addressed the case directly, stating that “today’s charges reinforce a decades-old message: corporate insiders cannot use confidential business information to turn a profit in our markets.” He added that Spagnuolo violated duties owed to his employer and that “insider trading compromises the integrity of our markets.” Spagnuolo now faces three separate federal charges. The first is one count of violating the Commodity Exchange Act, carrying a maximum sentence of ten years. The second is one count of wire fraud, which carries up to twenty years in prison. The third charge is money laundering, also carrying a maximum of twenty years. Together, the charges carry a combined maximum exposure of fifty years in federal prison. The actual sentence, however, will be determined by a judge. FBI Assistant Director James C. Barnacle, Jr. stated that Spagnuolo “allegedly abused his elevated access to confidential trends to place bets with nonpublic information.” He further confirmed that “the FBI remains dedicated to searching for fraudsters who betray their employer for personal financial gains.” The case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Thomas Burnett, Ryan B. Finkel, and Allison Nichols are leading the prosecution. Spagnuolo was presented before U.S. Magistrate Judge Sarah Netburn in the Southern District of New York following the unsealing of the complaint.