A software engineer at Google is facing federal charges after allegedly betting on confidential company information on Polymarket, netting more than $1.2 million in profits, the second insider trading prosecution against a user of the popular prediction market service in recent months.

In court papers released by the Justice Department, Michele Spagnuolo was accused of using an internal company tool late last year to look up data on Google's top-trending searches of 2025. He then allegedly placed millions in bets on Polymarket on whether or not various celebrities would rank among the most searched people on Google that year, weeks before the company released that information publicly in its annual Year in Search report.

The most widely searched person of 2025 ended up being D4vd, a singer who drew nationwide attention last year after a 15-year-old's dismembered body was found in the trunk of a car registered to him. Using the Polymarket username "AlphaRaccoon," Spagnuolo was accused of correctly betting hundreds of dollars that D4vd would show up in the most widely searched people, at a time when the market assessed the odds of D4vd appearing as fairly slim.

Days after the Year in Search data was publicly announced, Spagnuolo's Polymarket account allegedly transferred millions of dollars in cryptocurrency to a crypto wallet.

Spagnuolo was charged with commodities fraud, wire fraud and money laundering. The Commodity Futures Trading Commission also sued him in civil court on similar grounds.

The charges against Spagnuolo, an Italian citizen who lives in Switzerland, were unsealed on Wednesday. He was arrested in New York on Wednesday and appeared before a magistrate judge who released him on $2.25 million bond, the U.S. Attorney's Office for the Southern District of New York confirmed to CBS News.

CBS News has reached out to Spagnuolo and his attorney for comment.

A Google spokesperson said Spagnuolo has been placed on leave, and the tech giant is working with law enforcement.

"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," the spokesperson said.

Polymarket said on X that it flagged the trader. A spokesperson said the company worked closely with federal authorities, calling Polymarket "the only prediction platform to date whose cooperation has led to insider trading charges in the United States."

The charges against Spagnuolo came one month after a U.S. special forces soldier was arrested for allegedly winning over $400,000 by betting on the raid to capture former Venezuelan leader Nicolás Maduro before news of the raid was made public. The soldier pleaded not guilty.

The cases have highlighted concerns about the potential for insider trading on prediction markets, which have surged in popularity in recent years. Earlier this year, a data analyst told "60 Minutes" he has spotted other cases of Polymarket accounts raking in millions by correctly betting on U.S. military operations, sometimes achieving an unbelievably high win rate.

Polymarket has said insider trading is prohibited on its platform, and it polices misconduct and refers illegal acts to federal authorities.

"Blockchain trading is transparent, traceable, and bad actors leave footprints," the company spokesperson said. "We are committed to maintaining accurate, fair, and transparent markets as well as enforcing our rules and working with our regulators and law enforcement."

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