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Hmm.. tough one. You tell your wife, she tells your friends wife, friend gets pissed... You keep quiet, the friend's wife may somehow find out, your wife may find out you knew the entire time, you might be in the doghouse. You're definitely in a position that I do not envy. Personally, I'd keep quiet and like you said, hope that your friend gets caught. Your wife may get pissed if she finds out that you knew, but that's something you two can recover from. At least you won't be betraying your friendship.
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