Of course I agree with all that has been said, but I also wanted to add another thought. Your wife has been marinating in fantasy and deceit for a long time now. Personally, I think that has to be corrosive to the soul.
I believe that duping your spouse, participating in helping someone else dupe their spouse and then finding a way to actually justify that behavior changes you forever, and probably not in a good way. Add children to the mix on both sides and I think it magnifies those changes. And the longer it goes on, the longer they coarsen and harden.
In all honesty, I don't think you're doing your wife any favors right now. Give her the gift of having to live in the real world - she'll have to live there eventually - give her the opportunity to do so with some underlying character intact.
And, while I agree with everyone that her explanation for the BCP shouldn't matter, I would be highly skeptical of any explanation she manages to pull out of her hat.
