uBPDbm was threatening to kick BD#1 out if things don't go her way, the cop said to W "How is this your problem?"
The officer was correct... .don't let other people make their problems your problems. Here's an example of how I discovered that perspective.
Don't let others make their problems your problems. A long time ago when I was younger I worked as a lobby receptionist at a large hotel. Passersby would come in to take a look around. Sometimes people would come in and try to guilt me into letting them use a restroom. Sometimes even with kids hopping around desperate for, um, relief. I said the bathrooms were in the rooms. Sometimes they said, "Then where do you go?" And I replied, ":)ownstairs, in the basement, in a locked area. Please, there are restaurants across the street and down the block." Firm boundaries... .and redirection.
Although it can be hard at first, one simple word can say it all. "No." A person doesn't have to explain himself or herself. (Trying to explain to or reason with people who aren't listening and/or aren't reasonable is a fool's errand, so to speak.)
Also, although the wife may not have been a signer to the checking account, I doubt a spouse can have the other spouse arrested for outright fraud. After all, he must have been paying the bills previously. Also, she wasn't hiding the money or misusing it. If need be she could probably counter that prior checks ought to be reviewed where she had done the same and he had never objected before. If the claim doesn't go away then maybe a lawyer in your state can confirm whether that's so. I would think that any action to address it belongs in divorce court. Very smart of her to have the officer listen to her discussion with her estranged spouse. He's an officer of the court and as such he is trusted to be neutral, objective and trained to be believed by other authorities, barring proof to the contrary. When he writes up the report he can state he heard the conversation.