|Ma'ariv, May 8th, 1959, p. 15. Credits: see below.|
The story about how Cambridge University lost a correspondence game to the inmates at Bedlam (i.e., the Bethlehem insane asylum) is well known. One would suspect that it is spurious, but, as Edward Winter notes, the game was actually played.
A similar event had happened in 1961 in Israel, and, as Moshe Roytman notes, was reported in Ma'ariv on January 12th, 1961, p. 6. The newly-established Ramla chess club (says the article), looking for worthwhile opponents, found "under their nose" a chess team in... the local prison. The result of the match? You guessed it -- the prisoners won, 6 to 1. The excuse given (clearly not intended too seriously), by the Ramla club (the one on the outside, I mean)? 'They've got time to play there!'.
The number of games -- 7 -- leads one to think that the players in question was the same team which was one of four which, in another link provided by Roytman among many others about 'various issues' in this thread in the chess-il web site [both in Hebrew], scored respectably in the first Israeli prisons' tournament in 1959.
The event was a three-round team event with four 7-player teams, and was reported in Ma'ariv on May 8th, 1959, p. 15 (see picture above). The full results were: Ma'asiyahu 17/21, Tel Mond 13/21, Ramla 11/21, Mahane Ha'Miyum 1/21. In addition the same article notes that the tournament concluded with Dr. Menachem Oren playing a simultaneous game against 30, scoring +29 =1, the draw 'probably against a prisoner in jail for embezzlement, who was active in one of the chess clubs in his civilian life'.