How to protect the children?

My niece's loser DH walked out on her and their kids (now 2&3) in 09/11 and moved in w/another woman. After much verbal abuse and many threats to her by him, their divorce was final 01/12 which meant he had to begin paying CS. He began complaining he couldn't afford it, etc. all the while threatening my niece still. He has a police record of abuse towards her, BTW. I also have pictures of bruises he's left on another family member. He went three months without seeing his children until he decided to play my niece again in order to get money from her. She works two jobs while he only works one 4-5 hours a day, 4 or 5 days a week, if that. Since April, he's made her hand him every CS check she gets. He threatens to take the kids and run if she doesn't. She wants to be with her kids at night so she takes them to the shack he camps out in to spend the night. Two weeks ago, the 2 year old bit the 3 year old so he grabbed the Dawn dish detergent and squirted a lot in her mouth. She supposedly began choking and he didn't care. Another relative was there and grabbed her and saved her. The kids hate him and say he's mean. They don't want to be around him but the mom makes them because she's afraid of him. What can we, her family, do to protect these kids before he seriously hurts or kills one or all of them? He enjoys hurting people and making them cry. Even his own mother says he has psychological issues. Everbody is afraid of him but nobody will stand up to him because they're afraid of him. He "loves" my niece until she hands him money then he's gone again. It's a never-ending circle and not good for the kid's mental health either. Kids needs stability. These have none except what their grandmother, their primary caretaker, desperately tries to provide. Would she be able to petition for custody or something to protect them? Please help!