By Robin Respaut

NEW YORK (Reuters) - Within months of bringing him home, Sheila Trznadel knew that the boy she and her husband had adopted from Ukraine needed more help than her family could offer or afford.

The 7 year old was violent and never showed remorse. He switched on the gas oven in the Trznadels' Darien, Illinois home. He hid matches in his room, stashed scissors under his bed, and told his parents he wanted to kill the family. One doctor who treated him said the child exhibited traits of a psychopath.

His parents had sought help from their adoption agency, social workers, and lawmakers, but they quickly realized their options were few. If they continued to raise the boy, they believed they were risking the safety of their other children. They also couldn't afford the boy's treatment.

As a consequence, the Trznadels took a drastic step: They left their son in a hospital and told Illinois officials they would not take him back until he received the care he needed. The move is called a lockout, and it's not without risk. Most states consider it a crime - either child abandonment or neglect. The Trznadels hired a lawyer and offered authorities evidence to support their decision, including a psychiatric evaluation of the boy.

"I want people to understand how serious these situations are," says Sheila Trznadel, 37, whose son, now 10, is now a ward of the state. "It's not his fault. He is an innocent child," Trznadel says. "But the system is failing us, and it's failing him."

Over the last decade, 627 parents in Illinois have relinquished their children to obtain mental health services. In 2001, a report by the Government Accountability Office found about 3,700 children in 19 states entered the child welfare system within a single year.

Child welfare agencies say the system was not built to take children with severe mental health issues simply because the parents cannot afford to pay for such care. "We see this as a public policy issue," says Karen Hawkins, a spokesperson for the Illinois Department of Children and Family Services. "It's the lack of resources for community mental health funding for children. That is the context to which we're all working."

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When the Trznadels adopted their son in 2011, they knew little about his past. At the orphanage, the boy behaved strangely. He was hyperactive and sometimes defecated in his pants. Workers there said he was simply nervous.

After returning to the United States, the Trznadels say they realized the boy's problems were much more severe. He urinated on the furniture in their home and dumped paint into drawers of clothing. More than once, he told the family, "I'm gonna kill all you guys," Sheila recalls. "We didn't sleep. Someone was always awake to watch him."

The boy was diagnosed with fetal alcohol syndrome. He told doctors that he endured abuse in the orphanage. To help her son, Sheila searched the Internet, lobbied politicians, and took the boy to specialists for extensive psychological evaluations. He cycled through medications, including one that made him suicidal.

In 2012, Trznadels started sending him to a local hospital for short-term psychiatric care. "Our other kids were scared," Sheila says. "We were trying to give him a good home, and in doing so, we were giving our other children a home in lockdown."

For the Trznadels, costs swelled after the boy spent a month in a psychiatric hospital. Sheila works at a lab, and her husband, Doug, works for a chemical company. The hospital bill was $113,000, an amount they cannot afford.

The adoption agency the Trznadels used, Partners for Adoption, referred them to a social worker and suggested they seek help from the state of Illinois. The agency, which went out of business in 2012, wrote that it had not selected the child; instead, the family was offered the boy by orphanage officials in Ukraine.

In July 2012, the Trznadels left their son at the hospital, relinquishing custody to the state and forcing child welfare authorities to admit him into a residential treatment facility.

In a letter to the state's Department of Children and Family Services, the psychiatrist wrote that "even at a young age, displays hallmarks of psychopathy. He is unable to foresee the consequences of his action, he lacks guilt or remorse for any harm his actions might have caused."

The psychiatrist also wrote that it may not be advisable for the Trznadels to keep the boy, "because of the potential harm he would do to his family."

The state agreed to a "no-fault dependency," meaning the child lacked proper medical care through no fault of the parent. "The family has to fail before they get the support that they need. That's the way the system is set up," says Linda Spears, vice president of policy and public affairs at the Child Welfare League of America, a non-profit advocacy group.

Like other states, Illinois does have some resources available for adoptive families, but the programs are limited. Grants can defray the cost of some services for children with severe mental illnesses. But in fiscal year 2012, just 15 families received money from Illinois' Individual Care Grants; almost 87 percent of completed applications were denied, according to the program's annual report.

In February, the Illinois legislature introduced a bill to allow the state to temporarily assume custody of kids for the purpose of accessing mental health treatment. The bill is directed at families with children who have a serious mental illness, emotional disturbance, or developmental disability and would prohibit the state from forcing families to terminate their parental right. A state House of Representatives' committee is scheduled to hold a hearing on the bill today.

Child welfare workers are trying to transfer the boy out of the treatment facility and back into the Trznadel's home or into foster care, Sheila says. The Trznadels don't think he is ready, and a judge agreed, granting the boy another six months in residential treatment under the care of the state. The case will be re-evaluated in April.

(Reporting By Robin Respaut. Editing by Blake Morrison)