I think looking at the bigger picture op, which is very difficult to do when you're in the throws of devastation is the way to try to elevate yourself above his games.
You know the injustice of this situation, you do not need this ow to lie to you on top of his lies, in fact I would wonder why this older man with children from a previous marriage wanted you.
Do you care for his children at all, you obviously have all the childcare for your shared children whilst he carries on building his empire.
Now you sound intellegent, do you think you have bimboed yourself down to accomodate his needs, his dreams, his life and his independance ? His love bombing at the begining is now being used on someone else by the sounds of it to punish you for maybe daring to have some financial independance of your own, this is not only based on his selfishness but a fear of loss of control over you.
I would wager that this man has narcissitic tendancies and is fearful of you branching out and becoming less dependant on him, I've seen how these men operate, they denegrate, demeen and punish you for not being great earners yet they do not wish you to go out and attain that status at the same time.
That's the paradox and you can't win.
You need to rise above this man and his deranged legal sytem in your home, it's unjust and unfair and I believe you are better than that, he is bringing you down to his level.
I agree with the pp that you may have to play the long game but I do fear for your situation, he is whipping you up into such a paranoid frenzy that I fear you could provoke him into a narc rage and that could endanger you.
Take care, the arguments must be hell at the moment, and if he becomes aggresive call the police and have him taken away. If you wish to tell her husband you should be allowed to do so without fear of aggression.
It is also your right to gain as much support as possible at this time, this man is a cruel, unkind and abusive man that outwardly shows a different face, you have seen his mask fall and that is a dangerous time. I think he's using this woman to punish you (and have a bit of an ego boost at the same time) he clearly doesn't care or fear her husband and I doubt whether he cares for her really, he cares about himself, this though is probably the tip of the iceberg regarding his behaviour.
I wouldn't trust him as far as I could throw him and you need a plan to escape eventually.
Get mentally stronger, you will learn to do this through his metering out of pain toward, you, he's a bastard.
Take care