The level of organised crime in the area was worse than he had ever seen and was contributing to a "methamphetamine plague" in the South, he said.
"There is a much greater gang presence in the lower South Island than I've ever seen in my life."
Figures reveal the OCF has a significantly larger gang presence than the national average.
On January 22 this year, 60 prisoners at the Milburn prison were gang members and 133 had a gang connection or affiliation, according to figures obtained from Corrections under the Official Information Act.
In total, 40% of the of 483 inmates at OCF that day were gang members, affiliates or associates, compared to the national prison population figure of about 30%.
Corrections said in a statement "only a very small number" of North Island prisoners were released into Otago during the previous two years.
In 2017 and 2018, 775 prisoners were released from OCF. Twenty-eight of those who were released to an address in Otago had been sentenced in a North Island court.
"Only 11 of these people were affiliated to a gang," the statement said.
Cadogan says a seemingly small number of gang members or affiliates settling in a district like his could have a huge impact on the sophistication of criminality in the area.
A Corrections spokesman said only one prisoner with gang affiliations who had been sentenced in a North Island Court was released into the Clutha District from OCF in 2017 or 2018.
"We are not aware of any formal agreement stating that all prisoners accommodated at [OCF] will be returned to the location of their sentencing prior to being released.
"However we always endeavour to return prisoners to their home region to enable their successful reintegration," the Corrections spokesman said
The spokesman also said Corrections worked hard to prevent inmates returning to prison, including supporting them to address their offending and helping them overcome alcohol or drug issues.
"[OCF] is leading the way in helping ex-prisoners find employment on release, having placed nearly 100 people into work in the 12 months to January 2019."
Last month, the ODT reported prisoners and guards were living in fear of gang violence and random attacks at Otago's prison.
Corrections chief custodial officer Neil Beales said there was no evidence of a "significant" increase in the number of attacks on workers.
His comments came as three OCF staff members were assaulted in two separate incidents over two days in February, with two of them taken to hospital, sparking a review by the regional commissioner.
Otago Corrections Facility sees rise in "LA-style street gangs"
By far the largest gang inside the Milburn prison is the Mongrel Mob, with 64 members, affiliates or connections.
University of Canterbury sociologist Jarrod Gilbert, author of Patched: The History of Gangs in New Zealand, said the wide range of gangs inside OCF was due to blowouts in the prison muster in the North Island resulting in inmates being sent South.
"Obviously, there are groups down there that aren't from your community," Dr Gilbert said.
A striking feature of the data was the rise of "LA-style street gangs", such as the Crips (16 members/affiliates/connections inside OCF), Bloods (5) and Killer Beez (29), he said.
"Which is a really significant shift from historically, where we would have Mongrel Mob and Black Power dominating, followed up by outlaw motorcycle clubs, the likes of Road Knights and Southern Vikings."
Writing in Patched, Dr Gilbert said the Killer Beez were founded in Otara, South Auckland, in about 2003, under the leadership of Josh Masters, a member of outlaw motorcycle club the Tribesmen, who was released from prison last year after serving a lengthy sentence for dealing methamphetamine.
The gang thrived and generated huge media coverage after a spate of killings in 2006, becoming one of the few LA-style street gangs to achieve longevity in New Zealand.
Such gangs tended to create "institutional challenges" for Corrections staff, Dr Gilbert said.
"They tend to be younger, and younger men tend to be more violent."
A source working inside OCF said the gang was definitely one of the "bigger hitters," inside, holding sway over other groups.
However, a recently released prisoner who served time at OCF said he had no issue with the Killer Beez while inside.
"They are ... just people at the end of the day.
"Kind individuals that are very welcoming to you if you respect them. However, with all gangs, if you cross them you're in for some trouble," the former prisoner said.
Also notable from the figures was the presence of 15 members or affiliates of a gang called White Power.
Dr Gilbert said the South Island had long played host to white supremacist groups, but they were in a lull after their heyday in the 1990s.
Various outlaw motorcycle clubs also have members or associates inside OCF, including the Bandidos, Outlaws, Southern Vikings, Tribesmen and Head Hunters.
Writing in a letter attached to the data, Corrections National Commissioner Rachel Leota said the recruitment of prisoners into gangs and any gang-related activity was "actively discouraged" in prisons.
But as in the community, the proportion of prisoners identified as gang members has been steadily increasing over the past 30 years.
Corrections was working on a range of initiatives concerning gangs, including "site-based gang management plans, a framework to facilitate direct engagement with gangs and their whanau, and improved intelligence tools to inform staff and support the development of safe prison environments," she said.
Prisoners were identified as having gang connections by tattoos, gang paraphernalia, information from other agencies, admissions to staff, observations by staff and intelligence from other sources.
