The Google engineer charged with illegally using inside information to win bets on Polymarket could end up losing millions of dollars in stock and other compensation after his arrest, according to a report published Monday.
Michele Spagnuolo, a 36-year-old software engineer, was charged by the Department of Justice last week with wire fraud and money laundering after allegedly earning $1.2 million through his scheme – which involved using nonpublic Google data to win bets on which celebrities, such as rapper Kendrick Lamar, would appear among the “most-searched” people in the world.
Spagnuolo – who used the alias “AlphaRaccoon” on Polymarket – was promoted several times during his 12-year stint at Google, which awards stock grants in addition to high salaries for its workers. His most recent title is “staff information security engineer,” according to his LinkedIn account.
Google employees of that level typically earn hundreds of thousands of dollars in salary and stock per year – if not more than $1 million, the Wall Street Journal reported, citing data from Pave, which tracks compensation across the tech industry.
Google shares are trading above $370 as of Monday – up from about $30 when Spagnuolo was first hired in 2014. Millions of dollars in stock-based compensation are likely in the balance.
Spagnuolo was placed on leave after the charges against him were announced and the company will “take the appropriate action” as the case proceeds, a Google spokesperson said in a statement.
“We’re working with law enforcement on their investigation,” the spokesperson added. “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.”
Prosecutors in the Southern District of New York allege that Spagnuolo, who lives in Switzerland, placed bets worth $2.7 million between Oct. 15 and Dec. 4 of last year. He netted $1.2 million in profits on the wagers.
“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 feds wrote in their complaint.
The DOJ has increasingly looked to crack down on fraud on prediction markets as firms like Polymarket and Kalshi have surged in popularity.
In April, prosecutors arrested and charged a US Army Special Forces soldier, Master Sgt. Gannon Ken Van Dyke, for placing bets on the successful operation to capture Venezuelan dictator Nicolás Maduro using “sensitive, nonpublic, classified information.”
Van Dyke, who was said to be directly involved in the operation, allegedly won more than $400,000 through the illicit wagers.