In order to get thrown in jail, all you need to do is cause some trouble in town by attacking the male villager walking around with the sack and apple basket. After knocking him over twice, the guards will come to arrest you and throw you in 'jail' (a short cutscene). Merely do this 10 times and the trophy is yours. The trophy will award as soon as you reach the jail cutscene for the 10th time. You can't get thrown in jail until after you return from the first mission, for some reason.
Note: during the second mission, a dialog choice can cause you to repeatedly reach a similar cutscene of being in jail. This does NOT work to unlock the trophy. I tested this by getting thrown in jail in this manner 12 times and no trophy.
(Fun Fact: Crime and Punishment is the name of a famous 19th century novel by Russian author Fyodor Dostoyevsky. It contains no dragons)