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Thank you for the fast response. I believe I know what steps to take now and as long as I am doing it the proper way as listed above, I am not breaking the law. The only concern I have is the long wait I would have to deal with after providing supporting documents while being audited since the custodial parent wont sign the form 8332 and she already allowed others to claim the children.
When I mention about the "others" already claiming the kids, "others' are referred to: An individual who pays the custodial parent/or guardian an average of $700 per child to claim the child as dependent on taxes. There may or may not be related in any type.
Again, thank you for the comments and I need to make this official in court as well.