Thanks for expanding on this.
My immediate response is that, right, the children of the wrongly imprisoned person (let's call them "CWIP") are disadvantaged. So one of them goes for a job and the other candidate's parent wasn't wrongly imprisoned so you give the job to the CWIP, rather than to the person who spent years studying to be sure to qualify fully, lived through extreme poverty, cared for their sick parents ... the CWIP get the job through accident of birth ... and this is supposed to be better than having people get a job through accident of birth [eg because of an unrelated biological characteristic].
So, then you want to expand this and say, "well, look, more of these people with this characteristic have been disadvantaged in the past". But, they're only a group because of that characteristic. There are people who've been similarly disadvantaged outside that characteristic-group and adding additional disadvantage to them because of something they didn't do, that none of their ancestors even did, based solely on irrelevant biological characteristics (let's call that "IBC"; yes, things like skin colour). Surely you can see how injust that is.
Are you going to then flip things around and say, well we acted injustly to this generation because they didn't have the right IBC and now these children were discriminated against unfairly, so now we'll have to be unfair again? Anything else would be morally inconsistent and partial. So you wind yourself in knots.
Lets take your hypothetical end position, you want to help the disadvantaged in that town, because 95% of those you feel are disadvantaged are because they're CWIPs. What's wrong with offering assistance to all those disadvantaged? Are you concerned that one of those 5% of disadvantaged people might be a descendant of a juror/judge/policeman who acted improperly? Surely equal grace to the disadvantaged is better that injust discrimination against the rest of that 5% who weren't involved?
Let's take a different tack: Logically, you're going to want to discriminate in favour of those with long-standing native North American ancestry too. So do you favour all tribes? What if one tribe was instrumental in wiping out another, do you favour them both, despite the ancestors of the one having the other's blood on their hands. If it doesn't matter if your inherited genetics are from ancestors who were Blackfoot or Assiniboine [two tribes who IIUC warred against one another], why does it matter if your ancestors were French, Portugese or British [or whatever]? If none of those matter, then why do other inherited IBC matter?
Suppose I'm rich, from a family of millionaires for multiple generations; do you still want to discriminate for me against the poor because of IBC?
Perhaps USA is different but in my country, UK, it's possible for a motivated individual to go from decrepitude to being part of the 1% within a generation. Certainly it's possible for nearly all those who wish to work hard to get education (non-academic trade qualifications for example) that will set you up with a reasonable standard of life if you're prepared to work hard. [Aside: this is becoming more difficult it seems.]
You've put the case for ongoing racial discrimination very well but the way you propose introduces further injustices by design; you lift up all those who're black (say). The way I propose may mean that injustice takes a generation or so to be fiscally corrected but doesn't introduce further injustices which will take further generations still to correct; I choose to offer help to all those who're most disadvantaged regardless of irrelevant biological characteristics.
PS: I just wanted to add, I like your analogy and it certainly gave me pause and I'll definitely think on it some more. Thanks.