It may very well be that the mom isn't 'burying her head in the sand' thinking her child is perfect, but rather she just doesn't care. Just because you have a child doesn't mean your morals all get lined up. There are plenty of adults out there (with and without kids) that just feel that they can have what they want. Adults steal stuff all the time, adults feel that if they want it it is theirs, adults feel that they should get to have something because someone else can afford it but they can't so they can take it and the other person can just buy a new one. These people have kids too and they aren't likely to have a different set of standards for their child.

Unfortunately if this is the case then there is little hope of ever coming to a satisfactory end here because no matter how much you disapprove or how direct you are they will just shrug it off and deny it because in their mind they are justified in doing what they do.