It's not unusual for fiction to depict the effects crime can have on the criminal's family. This trope is about when the criminal's family reacts with either disbelief, disavowal of responsibility, or, if they're hedging their bets, both.
When confronted with evidence of serious wrongdoing, they often go through predictable emotional processes, most prominently denial. Denial as a psychological phenomenon can manifest in many forms.
When a family member or guardian is brought face-to-face with strong evidence that their child or more rarely other relative is a criminal, it will of course affect them in different ways. Some will sadly accept it and move on with their lives, some will be angry at their child, but maintain ties. To fall under this trope, though, the family must either;
React by denying any responsibility at all for the offending party.
React with rhetorical disbelief, where the family uses an expression of disbelief to show surprise.
React with totally irrational disbelief, some form of psychological denial.
Whichever way it is expressed, this trope can sometimes be used to help show that it is not just the victims' lives and families that are disrupted by serious crime, to humanise a criminal character, or forlaughs.
Even if these reactions apply only temporarily, they count. People change, and few people in fiction or real life remain in denial their whole life.
Contrast: The Family That Slays Together where not only did the parents raise their kids to be criminals but also treat crime as a family activity.
Compare: Parental Obliviousness, where the parents never realise their offspring is a criminal - subconscious cases of Mama Didn't Raise No Criminal might be stopping them from seeing the truth in some cases. Also compare I Have No Son, where family members deny even the physical fact of their blood relationship; and Don't Tell Mama.
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Anime and Manga
In Death Note, Light Yagami uses the title notebook to murder criminals, earning himself the name "Kira". His father, Police Chief Soichiro Yagami, gets put in charge of the investigation to find Kira and bring him to justice. His own son quickly becomes the prime suspect, causing much angst.
Even more so in the film, where he survives to see irrefutable proof of Light being Kira: his gloating over L's death, followed by an attempt to kill Soichiro himself.
Real-life examples of this trope are talked about in an episode of Lucky Star. Konata says "And they always ask the neighbors and they always say "He was such a nice boy. He didn't seem the type who could do that," to which Kagami responds with the subversion: "If you ever did something horrible, 'I always knew deep down she'd do something like this' is exactly what I'll tell everybody."
The page picture comes from Jo Jos Bizarre Adventure, and shows Holly Kujo referring to her son, Jotaro Kujo. It's also a subversion in that Jotaro hasn't committed any crimes - he locked himself in a prison cell out of fear of his "evil spirit" (read: Stand).
In Bitter Virgin, after Hinako finds out she was pregnant via the pain of a miscarriage, her mother immediately asks who the father was. When she says it was her stepfather, her mother slaps her and accuses her of telling horrible lies (Hinako earlier mentions that her stepfather was the first man she saw her mother happy with). After Hinako ends up pregnant a second time and again names her stepfather, this time with a doctor using bruises on her to suggest that she was raped, the mother believes her and chases the stepfather out with a knife.
Averted in Ultimate Spider-Woman: Change With the Light when Spider-Woman's Arch-Enemy Jack O'Lantern is revealed as Steven Mark Levins. Instead of irrationally denying it, Jack's relatives instead react with horror and dismay when they hear the news, along with the pure shock that they're related to a psychopathic mass murderer.
In Saki After Story, Teru goes into a rage and beats up her younger sister Saki, resulting in Saki being sent to the hospital and Teru being arrested. The sister's separated parents are shocked, both what happened to Saki and that Teru would be capable of doing such a thing.
In Frozen Hearts, a Frozen fanfic, (found here) the mother of Prince Hans is unwilling to believe that her youngest son could have plotted to kill Elsa and Anna to usurp the throne of Arendelle, reacting with rhetorical disbelief.
In the Lunaverse story "At the Grand Galloping Gala", the reason why Night Light is so hard on Trixie and Ponyville by association is because he can't believe Twilight did anything to cause trouble back in "Boast Busted" and instead lays the blame solely on Trixie. Ditzy eventually calls him out on it, using the fact that she herself is a mother to slap down his attempts at self-justification, stating that just because they're parents doesn't mean they should ignore their children's wrongdoing.
The 2009 Korean film Mother is about a mother's attempt to exonerate her son, who has been convicted of murdering a teenage girl based on shoddy evidence. It turns out he actually did kill her.
In the Inspector Montalbano mystery series, Montalbano has a childhood friend Gege who grew up to be a drug dealer and pimp, with whom he retained a sort of friendship even after they embarked on very different careers. Gege is killed by gangsters in the second novel, and Montalbano goes to console his older sister, who taught both of them as children. The narration describes how the two reminisce about Gege being a lovable mischievous scamp as a child, but no stories are told of any of his life after adolescence. It's not clear how much his sister knew about his criminal life, but she obviously had some idea, especially because she had poor health and Gege would use his funds to afford surgery for her.
In the Japanese novel Kokuhaku ("Confessions") and its film adaptation, Student B's (Naoki's) mother is like this, absolutely refusing to believe her son had any role in the death of Moriguchi's daughter. It's revealed he is the one who really killed her; he threw her into the pool to drown, as he desperately wanted Watanabe/Student A to be his friend.
The Agatha Christie book Pocket Full of Rye has old Miss Ramsbottom who refuses to answer the police's questions about the murder of her brother-in-law because, "Living in this house are two of my dead sister's children, and I refuse to believe anyone with Ramsbottom blood could commit murder." The murderer was in fact one of her sister's children, and based on her conversation with Miss Marple at the end, Miss Ramsbottom knew, at least subconsciously.
A Song of Ice and Fire has Cersei Lannister acting like this to her child by incest Joffrey. Once she brings up a story where her then-husband Robert (the king) hit Joffrey so hard that he knocked one of his teeth out "over some silly business about a cat," as she put it. Joffrey had cut the cat open so that he could see the kittens she was carrying. When Joffrey becomes king during the first book she also seems to be completely oblivious as to how awful of a King he is, supporting his every decision (except for beheading Nedd Stark) and lashing out at anyone that criticizes him despite the fact that he's a psychopath that is probably the worst king that Westeros has had since the last Targaryen king, whose very nickname was "The Mad King".
The Shield included an episode where the characters arrest a teenage vandal. Her mother arrives at the police station and harangues the officers about what a perfect angel her child is, until they open the door and the child is in the process of vandalising their interview room. Cue Crowning Moment of Funny.
Long Runner that it is, listing every single time this has happened in Law & Order and its various spinoffs would take up far more space than the database has. In fact, it'd probably be easier to list the ones that don't have this happen on a semi-regular basis. That would be... um... there has to be one.... Let us get back to you on that.
In Wiseguy, Vinnie's mother thinks he is a criminal, when he's actually working undercover for the Organized Crime Bureau. She eventually finds out the truth... but then worries that he's gradually becoming more and more like the criminals around him.
In the Star Trek episode "The Ultimate Computer", The "M-5" is a living computer which commits murder, but Dr. Richard Daystrom, its creator, defends the events as "accidents." Dr. McCoy says that "even when a child kills, a parent will usually continue to defend that child."
Criminal Minds dealt with this in season three: it turns out that the perpetrator of the Galen murders was a mentally impaired man who didn't really understand what he was doing. When his father found out, he covered it up on the grounds that his son wasn't a bad person, and he made the killer send the victims' kids stuffed animals every year on the anniversary of the murders so that his son wouldn't forget that he's capable of terrible things and would be careful never to let it happen again.
In a season one episode, Gideon deconstructs this trope with a father who continually makes excuses for his serial killer son.
Also appears in another episode of season one where a mother easily accepts that her son's murders aren't her fault. It was her fault, but it wasn't her son's murders. She was the killer.
An episode of The Fugitive has Kimble reuniting with his family. His father and sister are handling his situation well, but his brother is bitter over his difficulties holding a job once his bosses find out he's the brother of a supposed fugitive murderer.
Day Break: During one of the repeating days Detective Hopper visits his mother's home to further the investigation by digging up information on his dead father. When she chastizes him for not visiting her more often he explains that he's too busy at the moment since he's wanted for murder in Los Angeles, although he didn't actually do it. Her Response? "Well of course - I didn't raise no murderer!"
Ghoulishly subverted on an episode of CSI: Crime Scene Investigation when a murder suspect mistakenly thinks that his son is dead. When the victim's body is found bricked up in his house, he nonchalantly attempts to pin the entire crime on his son...unaware that the son is alive and well and watching the interrogation through a one-way mirror. This leads to an I Have No Father moment from the son.
XTC's "No Thugs In Our House" is about a police officer who confronts an oblivious judge's family about their son's neo-Nazi attacks on foreigners.
Dick Tracy has frequently addressed the problems that go with being the innocent relative of a criminal. One of the most notable examples is Junior's first girlfriend Model Jones, who was overwhelmingly ashamed of her crook brother and alcoholic parents. In the end, she was accidentally shot and killed by her own brother during a fight with the cops.
Neal Boortz is annoyed by this trope so much, he will preemptively suggest that the family will say such a thing when covering stories on criminals.
In Double Switch, Eddie's mother knows that her son is insane. However, she is strongly in denial over it and even acts as his accomplice at one point.
Subverted in No One Lives Forever 2: A Spy In H.A.R.M's Way: throughout the game, the Big Bad Director of H.A.R.M. keeps getting calls from his mother who keeps expressing her shame at her son's criminal activities.
When Taylor's father from Worm discovers that his teenaged daughter is a ruthless supervillain who holds the city of Brockton Bay in an iron grip, he's shocked. After she turns herself in he takes the opportunity to talk to her and get her side of the story, but the fact that she then murders two people in front of him damages chances for reconciliation badly.
This is sort of subverted in the second episode of Below Board, where the main character has a phone conversation with the mother of a jewelry store robber, who is fully aware that her son is a criminal, just not that he'd let his foreman manipulate him into pulling off a large heist and get himself killed in the process.
In The Batman, the Cluemaster lives in his mother's basement, and she seems completely oblivious to his criminal - and horribly sadistic - plans of revenge. In fact, she seems to have lost touch with reality over the years, seeing nothing odd in the least when Batman - in full costume - comes in to ask about him, regarding him as just another visitor.
Al Capone's mother always denied that her son was a ruthless gangster. In her own words: "Al is a good boy".
This also happens in a ton of real-life situations dealing with lawbreaking youngsters and their parents. To the frustration of many teachers, it also happens in school, where instead of punishing their child the parents get offended and either sue the school for some reason, try to get the teacher fired, or complain that the teacher just isn't teaching their child "right".