First, way to go for sticking up for your kids!
I don't have anything to offer that's going to make this go away. Seems like you need to prepare for battle on 2 fronts. One with the family and one with the bureaucrats. Bureaucracy moves slowly, so something may well be happening on that front right now. I wouldn't expect it to happen fast. If I was you, I'd find the best lawyer I could find, who has experience with this sort of thing, and hire them, even if I couldn't afford it. Sometimes just a letter written on the "right" letterhead gets taken more seriously. This is one of those situations, not unlike therapy, where you need the help of an expert and the thing to do is get the very best one you can find. On the family front, I think it's inevitable that people are going to chose sides and things sound like they will probably get worse before they get better. But, come what may, NONE of this is your "fault". It's the fault of the sick SOB who committed the crimes.
Best of luck & go get 'em!