A 36-year-old Google information security engineer was arrested Tuesday and charged with commodities fraud, wire fraud, and money laundering for using confidential internal search data to place winning bets on Polymarket, according to federal prosecutors. Michele Spagnuolo allegedly accessed a tool marked 'Google Confidential' that gave him real-time visibility into user search data for the company's 'Year in Search' rankings. He then used that edge to predict the rankings on the prediction market, winning roughly $1.2 million.
How the scheme worked
According to the criminal complaint, Spagnuolo transferred about $3.8 million in USDC to Polymarket and began placing bets on 2025 Google search rankings starting in May 2024. His success rate was high — because, prosecutors say, he knew the answers before the public did. The internal tool was technically available to all Google employees, but the company told investigators Spagnuolo's use violated policy. Google confirmed he's been placed on leave.
Spagnuolo appeared before U.S. Magistrate Judge Sarah Netburn and was released on a $2.25 million bond, secured by $1 million in cash.
The second Polymarket insider trading case in 30 days
This isn't an isolated arrest. In April, federal prosecutors charged U.S. Army Master Sergeant Gannon Ken Van Dyke with using classified military intelligence to bet on the capture of Nicolás Maduro. That was the first insider trading case tied to Polymarket. Now Spagnuolo is the second within a month, suggesting the DOJ is actively policing prediction markets for misused non-public information.
Both cases relied on blockchain transparency. The public ledger allowed prosecutors to trace Spagnuolo's deposits and bets, providing forensic evidence that traditional financial systems often hide.
Google's response and the civil case
Google said Spagnuolo's actions violated company policy and that he is now on leave. The CFTC filed a parallel civil case seeking disgorgement, restitution, and penalties. Polymarket cooperated with authorities throughout the investigation.
Spagnuolo now faces criminal charges in addition to the CFTC's civil suit. His next court date hasn't been set, but the $1 million cash bond suggests he'll be fighting the charges from outside a cell for now.
