US soldier arrested for allegedly winning $400K on Maduro raid

[0:00] A U.S. Special Forces soldier who was involved in the capture of Venezuelan President Nicolas Maduro [0:04] has been arrested and is facing five criminal charges. Prosecutors allege that Master Sergeant, [0:09] his name is Gannon Ken Van Dyke, bet on the operation and won $400,000 in profits. [0:16] They claim he opened an account in late December on Polymarket, which is an online prediction market, [0:22] placed about $32,000 on a long shot bet that Maduro would be out by January. [0:27] He allegedly made 13 bets in the days before the capture. [0:31] Now the case is raising questions about insider trading on prediction markets on the Iran war. [0:36] A reporter asked President Trump about it. [0:40] Are you concerned that federal employees are betting on these prediction markets and potentially getting rich? [0:46] Well, I don't know about it, but was he betting that they would get him or they wouldn't get him? [0:52] It sounds like he was betting on his removal from office, that Maduro would be removed. [0:56] It sounds like he was involved in the operation. [0:58] That's like Pete Rose betting on his own team. [1:01] I'll look into it. [1:01] There are also things that are being placed as well on the Iran conflict, too, [1:06] and there have been some trackings where people suspect that there's insider trading happening on these prediction markets around the war. [1:13] Are you concerned about that? [1:13] Well, you know, the whole world, unfortunately, has become somewhat of a casino. [1:19] The president later adding, quote, I don't like it conceptually, but it is what it is. [1:27] Joined now by two combat veterans, Margaret Donovan is a former Army captain and a JAG officer. [1:31] She's also a former federal prosecutor. [1:33] Adam Kinzinger is a former Republican congressman and retired Air Force lieutenant colonel. [1:37] Margaret, what is your reaction to the arrest? [1:41] How unprecedented and concerning is it and the president's reaction to it? [1:45] It is what it is. [1:46] He doesn't like it. [1:47] But the whole world is becoming a casino. [1:52] Well, look, I read the indictment, and I think it's a really righteous case. [1:55] This is particularly troubling conduct when we're at a moment where our military's credibility is in question, to say the least, in many of our operations. [2:04] And so I think it's really important for the Department of Justice to bring cases like this and to show that we are willing to respond to corruption. [2:11] Keep in mind that Maduro has his own criminal case in SDNY right now, and no doubt his attorneys are going to point to this and say, see how corrupt the arrest was? [2:19] So I think it's really important that the DOJ pursues this. [2:23] It's a strong indictment. [2:24] And it looks like their evidence is very reliable, probably from Polymarket itself and the Soldiers' Google account. [2:30] And I suspect that, you know, this will be a pretty important case going forward in terms of how the DOJ can deal with these Polymarket vets. [2:39] Congressman, were you surprised? [2:40] I mean, that someone, I mean, a Special Forces, you know, an operator at that level entrusted with some of the biggest and most sensitive military plans would allegedly do this? [2:50] I don't want to say I'm surprised because, I mean, this is very tempting, right? [2:54] If you know that this is going to happen and, you know, you're working every day to get by, you know, people are tempted. [3:01] They're humans. [3:02] But it's wrong. [3:03] And so this is good, you know, that obviously they're going after it. [3:07] But this needs to be more than just one soldier. [3:09] There really is some questionable stuff that's been happening, actually not just in the predictive markets, but especially in the stock markets, that seem to possibly be from people that are at least close to the decision making. [3:20] So, look, Polymarket and Kalshi have a real PR issue on their hand if they want to keep surviving, because I think people are starting to understand that this is a pretty bad situation. [3:31] Kalshi, I think, went after a few people here recently. [3:35] But, look, I'm uncomfortable with the fact that you can bet on actual human decisions that the human himself or herself can actually make. [3:45] Like, you know, if you're Pete Rose betting on baseball, you can't guarantee an outcome. [3:50] But if you're like the senator, I remember one specifically said, will a U.S. senator visit Syria before June? [3:56] Well, if you're a U.S. senator and you can go visit Syria, the temptation is you can bet on that. [4:02] Or maybe you have a cutaway, somebody you know, that can bet and you get a little side profit from it. [4:07] It's a very dangerous thing because it has the potential of starting to impact decisions based on profit and not based on what's necessarily right for the country. [4:17] Margaret, I mean, the prediction markets are kind of predicated on this notion that there is some insider knowledge, you know, that somebody in there knows something. [4:28] And whether it's some investor who has just done a whole lot of research and thinks they have an edge, what if the Maduro regime had somehow caught wind of unusual trades online? [4:44] Could that have, you know, I mean, maybe it's far fetched to think that would have spooked Maduro and caused him to go into hiding or change his security or something. [4:53] But the kind of the ripple effects or the future problems this may raise, I'm not even sure we kind of really fully understand them yet. [5:03] Yeah, I would I wouldn't even say, Anderson, that it's that far fetched that this could be a problem if you're just looking for basically an aberration in the poly market. [5:11] I think this really becomes in addition to the concerns that the very serious concerns that Adam just laid out. [5:16] This is a national security issue. [5:18] So if you have bets on, for example, if something's going to happen in Cuba and all of a sudden there's a spike in that bet the night before something happens, and that's really the crux of this case. [5:27] These are financial charges that are in this indictment. [5:30] But this is really a national security case. [5:32] This is a soldier who had really sensitive information about a highly guarded operation that only a few people, a handful of people within the military were entrusted with. [5:41] And he used that information. He disclosed that information on basically an open market that anybody could observe. [5:47] And I don't think it would take a rocket scientist to figure out dumping, you know, $30,000 into a wildly low bet on a high profile capture like Maduro that could tip people off very much so. [6:01] So I think that it really kind of this case in particular and others, they blend into national security issues. [6:07] Congressman, I mean, do you think all government officials, elected military civilian should be banned by law or an executive order or bill passed by Congress from taking part in, you know, prediction markets? [6:22] Is that a solution or would family members then just be tipped off? [6:27] I mean, you could, but I think you ban it all. [6:30] I mean, look, it's, you know, there's rules around Congress trading stocks. [6:34] You know, we have to show it and everything. [6:36] There's a lot of discussion about banning Congress from trading stocks. [6:40] This is more dangerous. [6:41] If you're in Congress, you know, if you're making a bet on a stock market, you may have a little insider information like, hey, we're getting ready to introduce a bill and maybe that moves the market. [6:51] You don't necessarily have like really insider information. [6:54] This you do. [6:55] And so, yes, I think the sites, if they were smart, they would get ahead of this and ban it. [7:01] They already have restrictions, but there's got to be a way to follow through on that and be strong about it. [7:06] But, you know, I'll double check what Margaret said there. [7:09] This is a real national security issue. [7:12] Your example, Anderson, is not far-fetched. [7:16] And I think it's important that we remember whether it's this to some extent, but especially on some of the questions on the stock market, there are losers on the other end of this bet. [7:26] It's not just rich people with a bunch of money playing poker. [7:29] There are losers, and it could be your 401k. [7:32] Let's get to CNN, senior legal analyst, Ellie Hoding. [7:35] Ellie, counselor, what needs to be proven here in order to convict? [7:40] What are the nature of the charges? [7:42] So, John, what's so unusual about this case is it's the first time we've ever seen somebody charge for their online activity on these prediction markets. [7:49] That said, it's still an insider trading case, the lead charge. [7:53] So, prosecutors first have to show that this defendant traded on what we call material, meaning important, non-public information. [8:00] So, if he had information, as he surely did, that Nicolas Maduro was to be captured on a certain date, that would certainly qualify. [8:08] Prosecutors also have to show that this person had what we call a fiduciary responsibility, meaning some official responsibility to take care of that information, to guard and protect it. [8:17] So, those are the core elements of an insider trading case. [8:21] And although we've traditionally seen that charge applied to bankers and people on Wall Street, there's no reason it couldn't necessarily be applied to anyone else who meets those definitions. [8:31] Still, you say this is the first case of its kind with Polymarket. [8:34] How do you think that will play into the legal strategy? [8:37] So, I think this could leave some legal wiggle room for this person to raise a defense. [8:43] And I think the defense will be, essentially, when you go on one of these online prediction markets and you take a side of a question, will Nicolas Maduro be captured by January 31st, 2026, there's a yes and a no. [8:55] And what these markets do is they match up a yes with a no. [8:58] And so, I would expect to see a defense motion saying, that's really no different than, John, if you and I bet on the Eagles-Patriots game. [9:05] They're taking one side and matching it up with the other side, and it's essentially a bet. [9:09] And I would look for the defense to argue that that means the insider trading charges are not valid. [9:15] I think the response from prosecutors will be, no, this is different than two friends placing a bet on a game. [9:19] This is a nationally available online service where people can bet against each other. [9:25] And this is relevant legally. [9:27] They'll argue Polymarket impacts interstate commerce. [9:30] It impacts the nation's commerce, whereas a friendly bet between two friends does not impact interstate commerce. [9:36] So, very quickly, President Trump had an interesting take on it that related to former major leaguer Pete Rose. [9:42] Listen. [9:44] Was he betting that they would get him or they wouldn't get him? [9:47] It sounds like he was betting on his removal from office, that Maduro would be removed. [9:52] It sounds like he was involved in the operation. [9:54] That's like Pete Rose betting on his own team. [9:56] It's a little like Pete Rose. [9:58] Pete Rose, he kept him out of the Hall of Fame because he bet on his own team. [10:01] Now, if he bet against his team, that would be no good, but he bet on his own team. [10:07] By the way, the president thinks Pete Rose should be in the Hall of Fame because he was only betting on his own team. [10:12] He also said, though, that he has some issues with this trading. [10:15] He calls it a big, giant casino here. [10:16] Nevertheless, does it matter at all that this master sergeant was betting on the operation, not against it? [10:23] No, it does not matter legally, John. [10:25] You can have insider trading based on somebody trading on positive information. [10:29] So, for example, if you had somebody who worked at a pharmaceutical company and knew that that company on, let's say, Tuesday was going to announce that they had a new miracle drug that had tested extraordinarily well in the clinical tests. [10:41] And that was secret information. [10:42] And then on Monday, that person went and bought a bunch of stock in their own company, knowing that that stock price would increase. [10:49] That would still absolutely be insider trading. [10:52] So even if you're betting positively on your own team, that still can be a crime.