Crossword Genius

State prison involved in corrupt activity (7,4)

Ross

I believe the answer is:

vatican city

'state' is the definition.
(Vatican City is an example)

'prison involved in corrupt activity' is the wordplay.
'prison' becomes 'can' (the can is American slang for prison).
'involved in' is an insertion indicator.
'corrupt' indicates an anagram.
'activity' anagrammed gives 'vaticity'.
'can' placed inside 'vaticity' is 'VATICAN CITY'.

(Another definition for vatican city that I've seen is " Papal state".)

I've seen this clue in The Independent.
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