Ask him whether he has called the police regarding this forgery. Get the name of the officer with whom he spoke and, if possible, a copy of the police report. If he did not report it, then you would have evidence that they are in league in the matter.
You cannot do anything about the fraud in small claims court. Your damages from the fraud would be the same as your damages to the property. You can, however, call the police yourself.
You can try. Your best choice is to hold them both liable on the contract. If he claims she forged his signature, point out that he is only saying that now because they are both trying to avoid their obligations. If she admits to the forgery, then argue that they have only come up with that scheme in an attempt to avoid liability. Good luck.