I know this family member that is receving money for 4 children and 3 of them has been living and being taking care of through the father of the parents and she is getting money and not living with the parents at all

She shouldn't be gathering money its fraudulent

Thats fraud and unfortunately its also a serious concern regarding the well-being of the children in that theres no checks and balances regarding who/whom is actually taking care of the kids. There wasnt a clear question here but Im gonna assume it would be "what should you do?" Do you know for sure that the children are being taken care of the way they should be? If they are, my suggestion would be to not get involved. This is an opinion and in no way constitutes advice beyond whats for reference. Now, if there is abuse going on or something of that nature, I personally would prolly tell a mandated reporter, such as a school teacher or doctor or someone like that. I dont believe in calling the police or CPS because in my 40 years of life i have NEVER witnessed that HELP the actual issue. Again, only my opinion. Im very wary of the fact that somewhere along the way our social evolution went the way of hurting not helping our fellow man. I WILL TRY TO HELP, WILL YOU?