The organization seems to not allow normal imperfections that your sons probably are going threw! As far as your wife finding a book written by Franz she should be happy it was not anything marital shattering! How dare her go to the elders that is silly and makes her untrustworthy, she married to you not the elders!
It is time for you to stand up! That book is not a book you should feel ashamed about or be punished for reading! and your wife should keep her mouth shut! You need to set an example for your children!