All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His Slave and Messenger.
It is indeed strange that your father would insolently commit acts that lead to evil as you mentioned. By doing so, he does not show shame before Allaah or before people, especially as he does so in front of you, your wife and sons. A person usually tends to have some shame in such circumstances.
You did well by advising him politely. This is proper for a son to do when his father commits prohibited acts. Please refer to Fatwa 19274. We advise you to continue to advise him and never to despair.
If your father lives with you in the same house, you should know that your wife is entitled to a separate accommodation where she can live free of any potential trouble. She is not obligated to live with your parents or with any one of them as clarified in Fatwa 84608. If you can provide a separate accommodation for your wife and children, this may solve the problem; otherwise, you are advised to consider not having female maids in the house. Please refer to Fataawa 92230 and 1962.
If the two options are not possible, then you and your wife should try to protect your children from his bad influence and you should continue advising your father and implore Allaah to bless him with guidance and help him come back to his senses.
Allaah Knows best.