How would you proceed with a situation where a friend had a parent sign POA while having symptoms of dementia?

So I'm writing this on behalf of my wife and her family and for my father in law, I have a handful of questions.

So to somewhat make a long story short. My wife's mother died in early 2000s and a family friend and her husband continued a long term friendship, however the wife and my wife's father became affair partners in which we only recently discovered.

Fast forward to 2016-2017, every October we go to camp and in 2016 he started to show signs of dementia, getting lost in the cabin among other things. By 2017 camp trip he was not sure who was who, couldn't get dressed properly, and many other types of symptoms including eventually having hallucinations in November, December etc...

Well he lived alone and my wife and I were brainstorming how to care for him in which we were going to move or put an addition on the house to accommodate him and then get daily care for him.

Well the woman that he had an affair with become very nasty about the situation and anytime we had him agreeing she'd get him and then have him saying no. And this ensued for weeks until she finally said "I didn't want it but your dad wanted us to have power of attorney" and she never told us the date of when this occurred. She said that my wife's dad thought that POA meant that they the friends were to take care of him if he got sick.

She kept toying with that she didn't want POA but she never would relinquish to the children of the family. My wife and brother in law kept saying to her can we get together and see what is what and everytime they'd ask something would set the woman off and it would never happen. Or she'd even say I don't even want POA or I already have a family to care for, but she'd never relinquish POA and I believe because she's got ulterior motives that she has to keep to herself..

Moving along though eventually he started to also have some TIA episodes, speech slurring etc... And had to go to the hospital and the nurses wouldn't really talk to my wife or her brother due to not being POA (which is infuriating to even see), but when asked when the POA was signed they did answer and said September of 2017.

So that was when my father in law was going thru the worst year of the dementia onset, and had been to his PCP and another doctor that was examining these symptoms etc...

The other thing to note is her husband is a notary which the nurses said it looks as if a female notarized it, and coincidentally his name is Terry.

So long story short after that hospital visit, she ended up putting him in a home which has made things very hard for my wife and the family as they simply wanted to be able to choose how to care for him.

The situation is awful, I feel so bad because I couldn't imagine being denied caring for my parents in how I deem fit and having someone not only make decisions, but also someone who's been so nasty and make you think that your father didn't and doesn't want his kids to care for him.

Now like my wife said when her dad was in his right frame of mind he'd always say you and your brother can handle things how you see fit. And now they have literally not a single say in anything and the frustration I feel for them is just awful.

I believe they need to get a lawyer and legally see what can be done. No children should be prevented from caring for their parents as they age and I hope that within the laws there is a leg to stand on since she appears to have signed this when he was really in bad shape with his onset of dementia, that has to account for something.

Sorry this was so long, but I'd love some opinions on it and or what some of you would do in a situation like this. Thanks in advance

Ben