He died in US prison because he was committing large scale fraud, specifically by claiming to be selling a miracle cure for cancer that didn't actually work.
For those curious, the miracle cure was sitting inside a special magic box he claimed would do something with your "orgone energy", which was like that orgasm/organism joke but posited as a real thing his device could help you with.
Reich had been persecuted on two continents long before he went crazy and raved about cloudbusting and orgone. The early psychoanalytic period was a wacky time by modern psychological standards, and his pseudoscience about "bions" didn't help. But what really did him in was his transgression of practitioner neutrality, his advocacy of free sexual expression, his touch-based therapies, and his insistence that a psychiatrist's job is to help reform society to better meet the psycho and the somatic needs of the masses. Only then could we prevent "neurosis" rather than just treat it. Even today the idea of reforming society to prevent mental illness is hugely controversial.
They burned his books, including "The Mass Psychology of Fascism" and his seminal "Character Analysis" in what has been called one of the worst instances of book burning in US history at the time. Looks like the burning times are back, eh?
He was jailed for refusing not to proselytize the Orgone box, but that was really a pretext. Orgone boxes aren't in any way dangerous. He was jailed because his theories and practice were a threat to the status quo.
Selling something to cure cancer that does not cure cancer is fraud and it's normal to go to jail for it - two years is not that long of a sentence for it, either. I would need to see a lot more evidence that his sentence for fraud was a pretext for political imprisonment to believe that.
To be perfectly clear, I'm familiar with multiple political prisoners in the USA and am well aware that the US does imprison people for political reasons. I'm just not convinced that this guy is one of them.
Your point about fake cures is well taken. But I hope you can see there was more involved. Imagine touching clients, working on their sexual expression, and pushing radical, explicitly anti-fascist social change in the USA during the height of "Leave it to Beaver", Behaviorism, and the Red Scare. The knives were out for him with or without the box. He came to the US to escape persecution but it followed him all the way from Europe and led to his untimely death and the utter destruction of his liberatory vision for psychiatry. The ground was scorched and we are still bereft of a comparable vision.
For those curious, the miracle cure was sitting inside a special magic box he claimed would do something with your "orgone energy", which was like that orgasm/organism joke but posited as a real thing his device could help you with.