Over a hundred years after Colonel Pyncheon's sudden death, the then-head of the Pyncheon family starts to feel guilty about the whole Matthew Maule thing. He decides the Pyncheon family legacy is built on a "black stain of blood" (1.29) and wants to give the House of the Seven Gables to a descendant of Matthew Maule. But before he can do this, he dies suddenly. The circumstances of his death are weird: his papers have obviously been searched through, and there is a bloody handprint smeared on one sheet of paper. So everyone immediately thinks he was murdered.
At the time of Uncle Jaffrey Pyncheon's death, his young nephew Clifford is living with him. Uncle Jaffrey has another nephew, also named Jaffrey Pyncheon, but this nephew is a bad sort, greedy and lazy, and the two men often fight. Despite this nephew's nasty character, it's on the evidence of this younger Jaffrey Pyncheon that Uncle Jaffrey's heir, Clifford Pyncheon, gets accused and convicted of Uncle Jaffrey's murder. The younger Jaffrey Pyncheon inherits his uncle's fortune and uses it to build his own respectable career as a judge. The only part of the Pyncheon legacy that doesn't go to him is the House of the Seven Gables itself, which falls to Hepzibah Pyncheon. Meanwhile, Judge Jaffrey Pyncheon leaves his totally innocent cousin to rot in jail for 30 years.
Uncle Jaffrey Pyncheon seems like he was probably a good guy. He clearly preferred Clifford to Jaffrey the Younger (a sign of good judgment), and he felt genuinely bad about the Maule-Pyncheon feud. We're sure that he would have been really disappointed to find out how Jaffrey the Younger exploited his death.
In fact, it was Jaffrey Pyncheon who searched through all of his uncle's papers. He was the one who found his uncle dead, of perfectly natural causes (the same stroke that killed Colonel Pyncheon), and decided to frame Clifford for the death. And it's Jaffrey Pyncheon who, having basically stolen his uncle's fortune in the first place, is still dissatisfied and wants Clifford to show him the (imaginary) secret to more cash. As Hepzibah points out, all of Jaffrey Pyncheon's behavior, from his treatment of his Uncle on down, demonstrates that he is "diseased in the mind" (15.41).