Journey to India

I met a lovely young woman, of Korean ancestry, but raised in Germany.
She is taking yoga teacher training here, and she remarked that her
yoga teacher, who is otherwise an impeccable guru, with high ethics
and values, accepts theft from within his own family. He told her that
his brother-in-law regularly disappears with his car, and uses it as a
taxi, and when the car is missing, he "finds" it, and returns it, all
washed and clean. Everyone knows he takes it, uses it as a car for
hire, and then pretends to find it again. The yoga teacher accepts
this as it is considered bad form to call a family member a liar, or a
thief, even though everyone knows it. So where do we draw the line? If
a family member is a thief, liar or worse still, a social criminal, is
it an Indian's duty to say nothing, to protect family beyond the law?
Beyond basic ethics? I find this hard to reconcile. What is it that we
owe our family members? Are we helping them to be the best they can be
by supporting their lies? How is this helpful? Indian families have
very poor boundaries when it comes to asserting their basic rights.
Indian people do stuff their whole lives in order to please their
families, often living an entire life outside their purported ethical
values. This is sad, and confusing for me.