This is a very difficult situation you are in both marriage and the lives on teenagers. It would appear that the teens are the victims and some authority should come in and deal with this. I am not advising as that is not my place no position to do so, but have you spoken to a pastor and or city, county authorities about providing or allowing teens to drink, abuse drugs and under age sexual activates? If not, start with a qualified senior pastor and ask advise and direction along with pray.
Not knowing you or your wife's past marriage experiences with each other and what has driven her to this life style, it would appear that the choice has been made on her part and the children are the ones in need of rescue.
Go for local support with your church pastor. . .get his or her advise and start a plan to get the children out of this environment. You mention that there has been no relief from court or the state. Does the court or the state officials know about the conditions the children live in and not only live in but appear to participate?
I'll be in prayer for you and with you that God will give you wisdom and direction as what steps to take.
God bless,
David
