That the end justifies the means, why would your mother tell you she would lie "to protect his children?" I think there is more to the story and you can go to low-income legal aid to at least explore your option, so you are accurately aware of where and how you stand.

If your relative fucks you over its far worse to me than a stranger doing it.

It happens all too often, and surely causes distress within a family. If the reason for the theft is justified, then one should forgive. If not, then mother seems to be enabling bad behavior, instead of practicing tough love.

File criminal charges against him. I doubt that your mother will expose herself to perjury charges.