Green’s Dictionary of Slang

(a) (US Und.) to be identified or caught in the act.

1859		Matsell Vocabulum 44: jacket To show one up; point one out. The fly cops pulled him, and allowed the flat cops to jacket him; so you see it was dusty for him; and I advised him to pick into Daisyville for a few moons until the down blew off.
1928		M.C. Sharpe Chicago May (1929) 237: I was told they knew I had been jacketed by Scotland Yard.
1935		A.J. Pollock Und. Speaks n.p.: Jacketed, caught in the criminal act.

(b) (US prison) to be labelled untrustworthy or given any form of bad reputation by fellow prisoners.

1977

E. Bunker Animal Factory 110: If you get a jacket as a punk . . .It’s the next worse thing to being jacketed as a stool pigeon.