I don’t understand what the third wallet does. If the first wallet is tainted, anybody can just look to see what destination wallets it sends to and follow the trail. Adding an extra wallet doesn’t help.

This is just part of the Bitcoin sales process: any time a case gets attention showing that a common marketing claim is wrong, the sales guys come up with a reason to say it was the victim’s fault rather than a weakness of the system they’re trying to get you to buy into.

It is not about obscuring the trail. It makes it harder to establish probable cause he orchestrated the fraud.

That doesn’t wash. Once the feds know who he is, he’s 99% of the way to fucked.

That's the point