Betts, who wears a large tattoo of birds, cherries, a dagger and a skull across her chest, acknowledged selling 81 photos for $300 to goth site BurningAngel and testified that she and her husband took the pictures after she had applied for a prison job but before she was hired at Roxbury Correctional Institution.
She was fired after only eight days on the job for "conduct unbecoming a corrections officer" stemming directly from the website pictures that were also distributed to Tabu Tattoo magazine.
Betts, who maintained that the pictures were a constitutionally protected form of self-expression, settled with Maryland for $10,000.
Maryland officials argued that Betts was fired for her own safety after some of the photos circulated among the prison staff. They contended that inmates eventually would have seen the photos, raising the risk of sexual assault or blackmail.
Administrative law Judge D. Harrison Pratt later sided with Betts and ordered her reinstatement, as well as back pay.
"Why an inmate would be more prone to attack because he has the employee's photographs rather than any other photographs has not been demonstrated," Pratt said in the decision.
Maryland prison inmates are allowed sexually explicit material but cannot use computers connected to the Internet.
The settlement does not include reinstatement.