Army soldier who placed insider bets on Maduro capture asks for pretrial dismissal

The Army soldier claims his Polymarket wagers related the the U.S. military capture of Nicolas Maduro in January were not illegal "swaps" as defined by federal commodities law.MANHATTAN (CN) — The U.S. Army soldier charged in a first-of-its-kind prediction market insider trading case urged a New York federal judge on Wednesday to throw out the indictment in which prosecutors accuse him of fraudulently netting $400,000 from bets on Polymarket that relied on insider information about the U.S. military’s capture of deposed Venezuelan president Nicolas Maduro.Gannon Ken Van Dyke, a master sergeant in the Special Forces, was hit with a five-count federal indictment in April, charging him with unlawful use of government information for personal gain, theft of nonpublic government information, wire fraud, commodities fraud and making an unlawful monetary transaction.He faces decades in prison if convicted.Ahead of a criminal trial in the Southern District of New York, Van Dyke argues in a motion to dismiss that his Polymarket prediction market wagers at issue in the indictment were “event contracts,” but not “swaps” as defined by the Commodity Exchange Act.“By the plain terms and structure of Dodd-Frank, the statutory term ‘swap’ covers financial instruments designed to hedge price risk and facilitate price discovery,” Van Dyke wrote in a motion to dismiss the indictment. “Numerous courts have so held. The wagers alleged in this indictment do not qualify, a reading confirmed by every relevant marker of congressional intent.”Agnifilo Intrater attorney Daniela Manzi handled Van Dyke’s argument that federal prosecutors have adopted a “limitless definition of what a swap is,” while the Commodity Exchange Act regulates transactions that Congress found serve public business interests: derivatives that facilitate hedging and price utility.U.S. District Judge Margaret Garnett, a Joe Biden appointee, asked Van Dyke’s defense if there is that big a difference between betting on weather events, such as a Super El Niño year, and betting on geopolitical events. “Don’t you have to convince me that no prediction market bet is a swap under the meaning of the CEA,” the judge said.Assistant U.S. Attorney Nicholas W. Chiuchiolo argued in response to the motion to the dismiss counts one through three adequately allege misconduct in connection with a swap.Chiuchiolo noted Congress conferred authority over swaps to the CFTC, defined “swap” broadly, and created a Special Rule — discretionary, case-by-case authority to bar swaps, including war and gaming contracts, when they are “contrary to the public interest.”To be a “swap,” Chiuchiolo said, Congress required only that an event be “associated with a potential financial, economic, or commercial consequence.”Agnifilo Intrater partner Zach Intrater later argued in support of Van Dyke’s motion to dismiss the other two counts on the grounds that confidential plans for a future military operation do not constitute the government’s “property” within the meaning of the wire fraud statute.“The Second Circuit has clearly stated that information of the kind charged in the indictment is not property,” he said.“How is the government injured?” Intrater asked regarding whether the confidential military plans held commercial value to the entity that possesses it.Garnett pointed to the “core of criminality” in the first three counts of Van Dyke’s indictment — related to taking confidential government information about an operation in which he was involved, and using it for personal financial gain — as a hurdle he was unlikely to overcome on the motion to dismiss.“I don’t think there really is an argument that someone in Mr. Van Dyke’s position could not possibly have known that the using classified information for his personal gain was not allowed,” she said.The judge did not immediately rule on the motions to dismiss.The Polymarket prediction market website is displayed on a computer screen, Jan. 11, 2026, in New York. (AP Photo/Wyatte Grantham-Philips, File)Federal prosecutors say Van Dyke was directly involved in Operation Absolute Resolve, the U.S. military mission that culminated in the capture of Maduro and his wife on Jan. 3. Despite signing nondisclosure agreements, he placed numerous Polymarket bets totaling around $34,000 in the days leading up to Maduro’s ouster, the government claims.When the prediction markets resolved following Maduro’s capture, Van Dyke’s shares were worth more than $400,000, prosecutors say.The Southern District of New York announced charges against Maduro in 2020, when Donald Trump-appointed U.S. Attorney Geoffrey S. Berman headed the office. Prosecutors then accused Maduro of conspiring with the Colombian guerrilla group FARC — the Revolutionary Armed Forces of Colombia.Prosecutors accused Maduro and his wife of conspiring to carry out a “massive-scale drug trafficking” operation that concentrated wealth within their family.The United States claims Maduro’s involvement in the drug trafficking conspiracy goes back at least as far as 1999, when he was elected to the Constituent National Assembly of Venezuela, and escalated in the 2000s while he served as minister of foreign affairs.Van Dyke pleaded not guilty to the insider trading indictment in April and was released on a $250,000 bond.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads