I advise you do nothing until you have thought it out very carefully. First off, there is no way to prove where the photo’s came from without very involved data forensics effort. Next, that neighbor could cause serious legal problems for your in-laws - it may sound crazy, but they could go after them for false accusation, etc.
On an open wireless network, literally anyone could have put the photos there. It would be very hard to prove where they came from, if not impossible. Even if some faces are recognized, that is not enough to say they did it - not legally.
It is against the law to access someone’s network without permission, but if the network is open, then this becomes a gray area.
As a network security professional, I strongly advise you seek legal advice before doing anything else. Find a lawyer who specializes in digital and data areas. The photos sound horrible, and I would be inclined to call the cops too, but be careful and move only after consulting legal advice. Also, disconnect the affected computer from the network and do not use the computer until deciding what to do.
The cops could think it’s your porn and you’re just trying to get the neighbors in trouble. After all who’s computer is it on?
Be careful.
I actually told her to get the kids out of the house tonite, have them stay with other family long term, do not talk to one more person about this, and call the best attorney money can buy right NOW. They have all four already violated multiple laws and committed many felonies, because of how stupid and crazy the sex offender laws are, particularly about child porn.
Nothing will matter — except what is found on THEIR in-laws computer, her husband helping to delete the files, and the wives knew about all this and encouraged the destruction of evidence. The children will be put into foster care immediately, and will be given humiliating and terrifying medical checkups to see if they have been victims of child porn themselves. Law enforcement will not check the pictures to exclude the children before removing them. All adults will be treated like mass murderers, with weapons drawn, handcuffed, and put in isolation cells (because of the sex crime charges).
Welcome to the criminal justice system in this country.