O.K., firstly, if you give a domestic animal that you found as a stray ANY type of medical care, it legally belongs to you-----at least that's the law where I'm at.
Secondly, if the shelter had picked up the puppies when you first found them, they most likely would have been euthanised by the time the kids had come around (you stated you had had them for 2 weeks-----the shelters in my area either euthanise or put up for adoption any animal brought in as a stray after 3 days).
And thirdly, I would never give an animal back to someone if it was in such horrible shape from their lack of care----besides, how do you know those kids actually owned the puppies to begin with? When I was in the 5th grade, a puppy showed up at my school just before recess. When I went in from recess, I told my teacher that it was my puppy and had followed me to school (I was a "walker"). The teacher actually gave me 10 min. to take the puppy back to my house-----and that's what I did and we kept it.
My younger sister and I also once went to a neighbor's house whose dog had had puppies and told them our parents said we could each pick out a puppy to take home. We picked them out, took the pups home, and kept them in the attic for a couple of weeks before telling our parents-------we had to take those ones back. So I know kids can and will lie about something like this.
Too bad Hubby gave the pup to the kids----good luck.