Just read your entire thread, and this is just from an outsider looking in, but I think you need to get your kids out of there, and now. This doesn't sound like a safe situation to me, it sounds at LEAST emotionally abusive (if not physically so), and I think you should see an attorney about getting temporary sole custody of them.
The heck with the finances -- OM/W's aren't much better than yours anyway. Your first responsibility here is as a DAD, and i don't get a good feeling at all about this guy.
