I always wondered how I'd handle being in your situation.
Not an easy decision. How about letting the wife know you saw her? Maybe you could convince her to let him know.
Or maybe he does know and he's not as straight as you think? I have a friend that has an extremely dry professional persona, a very likeable but private person with his friends, but he's very kinky and wicked in his very private life.
![Stick Out Tongue](/tfp/images/smilies/tongue.gif)