What you describe, is clearly child abuse. I'm surprised nobody else here has said that. Your wife has a problem of some kind. Please talk to a professional (lawyer, social worker - not your church counselor, they will not be seen as neutral professionals) and find out how to best proceed. You need to tell them everything.
It sounds like you have also been victimized in some way, but that you are finding your strength now.
You can request that you both take parenting classes. Encourage her time with the children, but be concerned about their safety. Hopefully, she has been less prone to abusing them in the shelter, where she probably has been surrounded by others.
M 16 yrs, WH62, P54 3 adult blended kids EA 11/13, BD1 6/14 PA fall 14, BD2 2/15 Piecing 2015, BD3 12/15 Separated 4/16 WH moved OW in 5/16 Divorced 6/15/17