Is the act of the sheikh who divided the money allocated for a needy family with another family without informing the donor or the agent considered haram and a betrayal of trust? And is handing the money to the sheikh instead of directly to the head of the family considered a betrayal of trust?

You should have delivered the amount to the family yourself, because the agent did not authorize you to appoint someone else. Your appointment of another person is considered an تجاوز (transgression) that necessitates ضمان (guarantee/indemnity). If the owners of the money waived part of the amount out of shyness from the شيخ (elder/scholar), then the remaining money must be returned to them, unless they waived it willingly. You must pay the remaining amount to the head of the family, and you may seek recourse from the شيخ for it.