Federal prosecutors charged a Google employee with fraud on Wednesday, alleging that he made $1.2 million off of bets using insider information on Polymarket.

Prosecutors claim that Michele Spagnuolo, a staff information security engineer at Google, used confidential information to place trades correctly betting that singer d4vd would be Google's most searched person in 2025.

Spagnuolo has been charged with money laundering, commodities fraud and wire fraud. The complaint, filed in the Southern District of New York, was unsealed on Wednesday.

ABC News first reported on the complaint. Spagnuolo was arrested Wednesday morning in New York, ABC reported.

"Spagnuolo had access to Google's internal data systems, including a particular Google internal software tool that provided him access to confidential, nonpublic Year in Search data," the prosecutors said in their complaint.

Some observers of the Polymarket platform flagged the user "AlphaRaccoon" back in December for suspicious trades on the most searched person contracts. The complaint Wednesday said that Spagnuolo was the person behind that account.

"Google officially and publicly announced its Year in Search 2025 results on or about December 4, 2025. Soon after it did so, Spagnuolo's AlphaRaccoon account, profited approximately $1.2 million on his Google Year in Search 2025-related bets," the complaint said.

Spagnuolo appeared before a federal magistrate judge Wednesday, He did not enter a plea and was released on a $2.25 million bond, ABC reported.

"We're working with law enforcement on their investigation," Google 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," the company added.

"Polymarket worked closely with the U.S. Attorney's Office for the Southern District of New York and the CFTC, and is the only prediction platform to date whose cooperation has led to insider trading charges in the United States," a Polymarket spokesperson said in a statement. "We are committed to maintaining accurate, fair, and transparent markets as well as enforcing our rules and working with our regulators and law enforcement."

Spagnuolo is also facing a civil case from the Commodity Futures Trading Commission, where he's charged with insider trading. The complaint detailed that Spagnuolo correctly predicted the outcomes of a slew of other search markets, including contracts like "Will Zohran Mamdani rank in the Top 5 most searched" and "Will Squid Game be the #1 searched TV show."

"Spagnuolo misappropriated the material Confidential Information by knowingly or recklessly using it to trade the 2025 Year in Search List Contracts in breach of his duties of trust and confidentiality," the CFTC complaint alleged.

The federal complaint marks the second high-profile insider trading case on Polymarket in just over a month.

In April, then-active U.S. Army Special Forces master sergeant Gannon Ken Van Dyke was arrested over charges that he used classified information to bet on contracts related to the U.S. operation to capture Venezuela President Nicolás Maduro. Prosecutors said Van Dyke made more than $400,000 off his trades.