The LL keeps digging himself a deeper hole.
In my opinion it seems obvious his wife cashed the check. He knows she cashed the check. But instead of admitting it, has decided to try and commit fraud.
I have to think this is not going to end well.
Fun story to watch.
Seems OP lives in a shit hole either way. I wouldn't be attempting to find another place. I would be done here instantly.
If the house has multiple mold problems, I can't see how anyone would willingly choose to live there.