Green’s Dictionary of Slang

(US prison) a federal, rather than a state prison.

2000		Foxy Brown ‘BK Anthem’ 🎵 By twenty-one some’ll be dead / By twenty-two the rest of these dudes’ll be in the feds.
2003		A.N. LeBlanc Random Family 285: This isn’t the feds. This is the jungle.
2010		A. Steinberg Running the Books 169: In the Feds, if the Hasids got upset with something, they’d swarm around the warden and start doing this . . .