Former prison contractor charged in Otisville bribery and contraband scheme

Federal prosecutors charged Terri Lynn Outer, 50, of Montague, New Jersey, with bribery, providing or possessing contraband in prison, and conspiracy to provide or possess contraband in prison in a case tied to Federal Correctional Institution Otisville in Orange County. The Southern District of New York said the former Bureau of Prisons contractor faces a bribery count carrying a maximum of 15 years in prison, plus two contraband-related counts carrying five years each.

U.S. Attorney Jay Clayton said, “As alleged, Terri Lynn Outer accepted bribes from federal inmates, their family members, and their associates in exchange for smuggling contraband, including drugs, into a federal prison.” Prosecutors said the alleged pipeline reached the prison through payments from inmates and people connected to them, with contraband pushed into a facility that sits inside one of the county’s most visible federal institutions.

A search tied to the case turned up about 3.2 pounds of marijuana and 6.7 pounds of loose-leaf tobacco, according to the court filing announced June 24, 2026. Outer was identified as a former Bureau of Prisons contractor, not a sworn correctional officer, a detail that puts the focus on contractor screening and oversight inside the prison rather than only on uniformed staff.

For Orange County, the case reaches beyond one defendant. FCI Otisville is in the Southern District of New York’s jurisdiction, and the district includes Orange County along with Manhattan, the Bronx, Dutchess, Putnam, Rockland, Sullivan and Westchester counties. Prosecutors have previously brought cases involving bribery and contraband-smuggling schemes at federal facilities, underscoring how quickly prison corruption can threaten safety, operations and public trust inside a system built to keep contraband out.