Federal prosecutors say a Google employee used confidential company data to win $1.2 million on Polymarket bets tied to Google Search trends in 2025, an allegation that lands somewhere between a market manipulation case and a spectacularly bad workplace decision.
The employee, Michele Spagnuolo, was arrested in New York on Wednesday and later released on a $2.25 million bond, according to ABC News. He has been charged with commodities fraud, wire fraud, and money laundering.
In a newly unsealed complaint, prosecutors allege Spagnuolo had access to internal Google information that gave him an unfair advantage over other traders. The complaint says he “knew the outcome of these wagers before the trading public did because he had accessed Google’s confidential, commercially valuable internal data.”
What prosecutors say happened
Spagnuolo allegedly placed the wagers on Polymarket using the username AlphaRacoon. His run of successful bets related to Google Search trends drew attention last December from outlets including Forbes and from social media users, who noticed that the account seemed unusually confident about outcomes that were supposed to be hard to call.
One bet cited in the complaint involved the singer D4vd. Prosecutors say Spagnuolo correctly predicted that D4vd would “be the #1 searched person on Google” in 2025, even though Polymarket had assigned that outcome a “near-zero probability.”
That kind of prediction would normally require either extraordinary luck, unusually sharp analysis, or information other traders did not have. Prosecutors are arguing for the third option.
Why Google’s Year in Search lists are difficult to predict
The case turns in part on how Google calculates its annual Search trends. The relevant lists are not simply rankings of the people or topics with the most total searches.
Google has said last year’s terms were ranked by the “highest increase in traffic” between January 1, 2025, and November 25, 2025. In other words, the lists were based on spikes in interest, not raw search volume.
Google explained the approach this way: “By measuring the spike in interest rather than the total number of searches, we can identify the trends that were unique to 2025.”
That distinction matters because it makes the results harder to predict from the outside. A globally famous person may generate more total searches, while a smaller or more unexpected name could surge sharply enough to top a trend list. Prosecutors say Spagnuolo also bet that Pope Leo XIV and Kendrick Lamar would not appear on Google’s “Year in Search 2025” lists, another set of wagers that would be difficult to predict from outside the company.
The alleged cover-up after the winnings
The complaint does not stop at the bets themselves. Prosecutors also accuse Spagnuolo of trying to hide what happened after he won.
“Once he won, Spagnuolo then took deliberate steps to conceal his unlawful use of nonpublic information by attempting to obscure the source and ownership of his unlawful proceeds,” the complaint says.
Those allegations help explain the money laundering charge alongside the commodities fraud and wire fraud counts. The government’s theory is not just that Spagnuolo traded on inside information, but that he then tried to make the money harder to trace.
The case arrives shortly after another federal prosecution involving Polymarket. Last month, prosecutors charged U.S. Army soldier Gannon Ken Van Dyke with fraud for allegedly placing a $400,000 Polymarket bet related to the capture of Venezuelan President Nicolás Maduro.
Polymarket says its systems flagged the activity
Polymarket responded in a statement on X by calling itself “the enforcement leader” and saying its “market integrity infrastructure” flagged Spagnuolo’s activity.
“Blockchain trading is transparent, traceable, and bad actors leave footprints,” the company wrote.
That may be true as far as tracing transactions goes. It is less comforting for people who placed money on the other side of the trades without access to the same information, which is more or less the central point of the complaint.
The allegations come as prediction market platforms including Polymarket and Kalshi face growing scrutiny from state regulators. Several states have moved to regulate the platforms over concerns that they can enable insider trading or other unfair advantages.
The Commodity Futures Trading Commission has pushed back against some of those state-level actions, saying it has “exclusive” authority over prediction markets. President Donald Trump has also opposed the state moves.
Google says the employee is on leave
Google spokesperson Jaclyn Vazquez said the company is cooperating with investigators.
“We’re working with law enforcement on their investigation,” Vazquez said in a statement. “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.”
For Google, the case raises a familiar problem in a newer setting: employees at large tech companies often have access to information that can move markets, shape public attention, or, in this case, settle wagers. Prediction markets turn that information into something directly tradable.
For everyone else, the case is a reminder that “prediction” can mean very different things depending on who is doing it, and what they saw before placing the bet.
