You also need a gun equipped when you talk to the NPC (and have bolt cutters in your inventory) or he'll say something like "you don't scare me".
What I'd like to know is the following: if I initiate a jailbreak and a skillful pilot picks me up and lands me in the jail (without going too far away from the npc during the transport) and then leaves me in there with a jail outfit on is that bannable? It's seriously sneaky, but is it exploiting?