Thanks for the advice, everyone. The idea that the kids are being abused is completely ridiculous, and I think C's parents know that. They're well-fed, well-clothed, developing appropriately to their age. I really don't see how anything going on here could be construed as abusive. At the same time, we're planning to get some legal advice, just to be safe.
So far, we've had no further word from C's parents. I guess we'll just wait and see what happens.