The bartender has indeed heard of Ismail Tarrega. In fact, Tarrega used to run this town together with his siblings. But then the Dutch showed up and had him arrested. He will probably be hanged soon - but the bartender suggests asking around in town if you want to know more.
This mission basically serves to introduce you to Grand Turk, to give you some of the backstory of the place and its inhabitants, and to point you towards the next set of mission contacts. You just have to talk to a variety of NPCs - see list below - before you can claim the follow-up mission (see also Additional Notes below)
The distance indicator in your mission journal is bugged too because it points to the Longboat Coxswain (who only gives you the option to enter the Open Sea). Instead, you have to go to the other pier, about 30 yards away from the Coxswain. There will be a boat at the end of that (which shows up as a door to the pirate hideout on your local map). This is where you need to go and where you'll find Ismail's siblings.